Tuesday, November 26, 2013

Is there a lean approach to organizing value through the value chain? When to outsource or not?

Hello everyone!  Happy Holidays to you all!!  

This post is shared from my post on http://www.theleanedge.org

Question this month:

Is there a lean approach to organizing value throughout the value chain?
Automotive companies tend to outsource all except body and engine, and service organizations such as banks and insurance companies are now arguing they should do the same in order to become lean. Is there a specific lean approach to where value should be in the supply chain? Is there a unique Toyota way of doing so?

My reply:

There can be several ways to determine when outsourcing is an option for an organization.
How I share my thoughts about it to others is based on my experience inside and outside of Toyota. I believe there must be a need to outsource a process, service or product. So what is that need or criteria?
This means there should be an overall “value-add” to the company business indicators in making this decision /change. Just to outsource without increasing value can be considered just a manpower reduction, and unfortunately many industry would consider that a Lean activity -(Less Employees Are Needed).
Manpower reduction alone can ignite the already existing fear that may be present in a declining culture of conditioned people, who have by default; made a clear extinction between management and themselves. (We versus They= people versus management).
When examining this decision as an organization, there will be many factors that will help clarify the next steps.
One crucial factor would be the need to control quality. If the product, service or process is highly sensitive (“zero tolerance” type policy) then this particular process may never be a candidate for outsourcing. In my world at Toyota these would be critical items such as brakes, air bags, or steering columns on a vehicle.
When there is a product, service, or process that is a possible candidate for outsourcing (added value has been determined), then a review of the supplier’s capability and capacity should begin. This vetting process ensures the product will meet necessary quality, productivity and cost expectations which should align with customer need internally and externally.
When a supplier is selected this should be the beginning of a long term relationship that fosters ongoing cost, production and quality improvements. This should be “leading and learning” dialogue between the company and the supplier with continuous improvement as a backdrop.
The overall bottom line with an outsourcing decision should have no impact on the final output in regard to quality, however by adding value it will have a positive result on the production, costs. For example, if an organization has increased demand for their product then decisions should be made about how the outsourcing process should be used to support this demand. (Rebalancing or reallocation of work using value stream mapping from order to customer). This process, if done correctly, should help build mutual trust and respect with your workforce, and engage your people in this value adding process along the way – they are truly your most important asset.
Until next time
Tracey Richardson

Wednesday, September 25, 2013

How do you involve and organization in PDCA and Lean Thinking across all functional areas and departments?

I would like to share another post I contributed to on Michael Balle's The Lean Edge - theleanedge.org check it out other opinions from Lean Authors and Practitioner's!!

How do you involve and organization in PDCA and Lean Thinking across all functional areas and departments?

I often like to start off by discussing the scientific method (PDCA) by differentiating the “process” from the “tool” side of it. These are two very different things. When I visit clients or do public sessions my experience from grasping the current state that more people (various levels and industries) see it as a tool. Some would argue to say it is, my preference and how I was taught is to fully understand the thinking process behind the tool. So if you are trying to move your organization to see through the same lens its often good to clarify expectations and explain why changing a business model or how you think is necessary. I tend to refer to it (as others have) as horizontal and vertical alignment/thinking (harmonizing the silos). So vertically within all your departments from the process owner to the president there should be an alignment of “thinking” and horizontally across the functional areas (ie – accounting, payroll, human resources, manufacturing or service output, engineering, design etc) there should be a similar lens to articulate through.
Organizationally most are naturally silo’ed, some see this as a negative, I see it as a functional necessity since everyone in the organization has a different line of sight and role to the overall value stream, the commonality “should” be the company key performance indicators, true north and the people development side (back to process). These should always be your guiding beacons to guide the occasional “stray arrow” back towards alignment. I think if you focus on certain commonalities in an organization such as understanding the process from order to customer, (regardless of industry, product or service) then it will immediately give you a couple of areas to close in on which could be:
1. What are our the percentage of leading KPI’s to lagging KPI’s in your organization?
A leading indicator is one that is predictive and lets you know when the process needs change. A lagging indicator is nice to understand and necessary to see the ultimate result of business but its also historical information. Its hard to make change once something has happened. If we are only tracking results across the organization then chances are we are reacting. So a good business model through use of the scientific method is to always look for process leading indicators that in turn effect your results. My Japanese trainers would always insist – “Results are the outcome to good processes”.
2. Do you have visualization of the problem, and are there known standards?
This can really be effective if each team/department/section can develop a visual management system in order understand and grasp the current state at all times. Developing the people side of this thinking requires a certain level of standardization within your processes- this is a discipline that requires a leader at any level to hold people accountable. If you have a best practice for a process then it allows you to see abnormality at a glance, this is priceless in understanding and dialing in on process indicators that can be tracked to improve the standards, to me it is its on mini PDCA cycle that happens at the process owner level. This should then continue to work upward into the next level supervisor and assist in how they lead and develop their people. It all sounds incredibly simple and it can be if the “D and A” is being built and practiced within the culture (Discipline and Accountability).
3. Are you leaders actions tangible to the company values?
Most organizations have a set of values they go by or have a beautifully framed and matted picture of them (the values) in the lobby area. This can be spectacular for someone visiting or a customer to see, but what does it mean internally to your people? I was always taught that company values should translate to actions, this way I’m walking the walk and people belief that I have the best interest of the company and people at heart. If you can’t translate values to tangible actions sometimes the true meaning of what a company is about is lost in translation which in turn could create moral issues. This is one area that should be recognized as you are trying to “see through the same lens”. It can alleviate potential conflict, and develop your leaders to a more “servant leadership role”.
I think all these areas listed above (among many others) can help develop people and bridge the gaps of what the company is trying to accomplish through the entire value stream and how each person at a process level plays an important role in making that happen (line of sight). I think it boils down to respect for people and ensuring they understand the importance of seeing through the same lens and how utilizing their extraordinary brain power is such an asset to the organization, without people and their ability to grow could hinder your long term success and sustainability as an organization. One of the most overlooked forms of waste is the “under-utilization” of people and their ability to “think”.
Until next time
Tracey Richardson

Tuesday, August 6, 2013

How can the Chief Information Officer contribute to a lean transformation?

Hello everyone,
Sharing with you my post from Theleanedge.org (Michael Balle's) website of Lean Practitioners coming together and answering questions about Lean transformation/implementation.

The question this month is:

How can the Chief Information Officer contribute to a lean transformation? 

Go here to visit The Lean Edge or read below:


When I see or hear this question, I pause and attempt to grasp the situation of what does a “major lean” transformation mean to an executive or the “process owner” of the lean journey. By answering this question it helps me understand their own ability to grasp the magnitude of what they are attempting and their role in it. Not many stop to ask this question and assumptions are made. When I’m at various organizations or conference sessions I think one of the commonalities among these folks is asking – How do I get my leadership onboard? They also ask- Will my Lean contributions be successful to the overall goals if my leaders aren’t bought in to the process? These repetitive questions tell me a lot about the current state of many organizations and their attempts at change and who’s changing it. This is a very good question, one that many in the Lean community can benefit from based on all our experiences.

I think when I hear the word leader it defaults me to “servant leadership”, based on what my Japanese trainers taught me. In the past traditional leadership is about “people work for me”, in a Lean management system it means ” I work for my people”, this is a paradigm shift in thinking for some people and their leadership styles within the organization. I think the first step for higher level leadership who are responsible for changing the way an organization does business begins by developing this action which leads to a habit. I believe the most simplistic way of starting this habit is to ask – where is this organization in regard to where we want to be? This can be in the context of the key performance business indicators (KPI), in regard to the customer value stream, the processes / standard work that deliver the outputs/services, our ability to develop people, and our mechanism to see abnormality. These are avenues to grasp the situation and understand the causes, barriers and constraints that are preventing an organization from getting there.

I also think its key for higher level leaders to understand- what are we actually measuring? So many organizations I talk to tend to be tipping towards the result side of measures, I tend refer to this as “leading and lagging” measures or (process and results). If we measure the majority of lagging indicators it hinders us, or even to some extent, masks the true current state or our ability to see it. For example, I will use the airlines as a way to explain where you can choose to measure as an organization. Most airlines I’ve experienced measure “on time” as when they leave the jet-way. Most customers may see that measure a bit differently. Just because I leave the jet-way on-time doesn’t necessarily mean I will be on-time to my destination. What are the processes in between that are more leading and can be more predictive to the customer need enabling us to make modify work, as well as the things that are controllable to reduce waste on a leading side. If we are being a more predictive organization this can be an important factor to enhancing our Lean management system. If I track Safety incidents, that’s a lagging historical indicator; its good I track it, but its better I find a leading process indicator to prevent the lagging. I think many executives aren’t at a 5000 to 500 foot level in the organization to understand this concept and tend to overlook the importance of measurements and how they cascade downward to the daily work.

If I am a true lean leader and lead as an executive then I must play a heavy support role in understanding what and how are we measuring against the customer need and how am I looking at processes that are as value-added as possible to the value stream. I often suggest to folks that are balancing the scales of the leading and lagging indicators that it is an important discussion to have and understand – “how are we doing>> and how do we know? This is also important how we cascade this thinking throughout all levels of the organization (50000 foot to 500) otherwise known as Strategy deployment. I don’t think its realistic for executives to spend all their time on the floor (the go see), but I do feel they need to have a “finger on the pulse” as to current state versus ideal through their management team and people who are doing the work. So I do think there is a percentage of time necessary to grasp this and be a presence out there building mutual trust and respect within the organization. So I think it’s fair to expect our CEO’s, Presidents, Vice Presidents and so on to be that servant leader we discussed above, they must attempt daily to play a support role by enabling the front lines and their management levels to have the resources necessary to deal with abnormality against a standard. They must support the organization by having the ability to see through the same lens when it comes to Problem Solving (PDCA), speak the language and overall be seen as someone that isn’t afraid to get their hands dirty and empower people to believe they are capable of doing extraordinary things. Development and empowerment of people can determine the rise and fall of an organization. I believe this is the beginning of how you create an infrastructure of the culture necessary to have long-term growth and sustainability. So what’s in it for me should be clear and concise, because an organization that engages, involves, challenges and empowers people at all levels to always think about where we are and were we want to be at all levels can be a contagious feeling. One I experienced first-hand and consider “price-less”. It can be done it’s all about the discipline and accountability for doing it. As I’ve hear Jim Womack say – Lean is not always about what to “do”, its about “doing” it. You jump that hurdle- you are well ahead of the game.

Tracey Richardson

Friday, August 2, 2013

What do effective leaders actually do every day? GTS4 (to the Fourth power)!!

Hey guys, Im sharing my post from the new Lean Post at the Lean Enterprise Institute, read below or check it out on Lean.org --http://www.lean.org/LeanPost/Posting.cfm?LeanPostId=43

What is GTS to the Fourth Power????

I'm often asked: "What should our leaders actually do in a Lean culture"? People want to know specific actions to guide their activities. They want a "recipe" to follow. Some folks want to wave a magic wand that suddenly transforms everything. Wouldn't it be great if anything were so easy?
In reality, Lean has to be lived, felt, breathed, seen, and experienced. It must be reinforced by senior leaders who walk the walk and set high expectations for team members. When I was at Toyota, the Japanese trainers commonly used the word "behave." At first, this sounded like the kind of directions we were given as kids in school, but when I thought more deeply about it, I realized they were speaking about particular behaviors. Behaviors and actions that created good habits, developed the character of team members, and fostered a learning culture.
So when I am asked about leadership and responsibility, I reply that lean leadership is a way of doing business, not simply a process to "think" through or try on for size. I call this idea (which really is a way to remember key behaviors and actions) "GTS4" (GTS to the fourth power)". What does it mean? Here are the four steps involved in the GTS thinking process:
Go to See --> Grasp the Situation --> Get to Solution --> Get to Standard = GTS4
The starting point for any lean thinking activity (and the beginning of the PDCA process) is Go To See (GTS), also known as Go To the Source (GTS). This habit is hard to develop, since we tend to rely on assumptions formed from our experience or from what someone has told us. My Japanese trainers would often say, "Please--Go Looking!" They may have known just a minimal amount of English, but we always knew what they meant. When I visit the gemba with clients they usually struggle to answer my questions because they lack the facts—the measurable data to work with. Instead, they have assumptions. It is only when we GO SEE and talk with the people who do the work every day that we can uncover the truth of what is really going on.

Why GTS4? Going to see is just the beginning. Once we GO SEE, we must then Grasp The Situation. We do this by asking the right questions! Let's start with the three most essential questions a company and its leaders (at every level) should be asking themselves:
  • What should be happening?
  • What is currently happening?
  • What is your measurable (gap) between the 2 above?
The first question is aimed at defining the ideal state, or standard. The second question defines your current state. Consider your problem as the gap between these two conditions. This type of "thinking" is really the first step in framing a problem in the Plan-Do-Check-Action (PDCA) process. In this clarifying the problem step, it is essential that you have a measurable "gap". This enables the problem owner to see a measurable difference once the process is defined, root cause(s) found, and countermeasure(s) implemented. So the answers to these two questions should always be quantified! For example, this visual shows the Ideal-Current-Gap:
The Gap
This gives us a $21 gap we can begin to break down and ask more questions about!
Most companies I work with (even ones you'd think should know!) can't answer those 3 questions. As a result they have difficulty framing a problem as a simple gap between what should be happening and what is actually happening because the measurability just isn't being tracked at the process.
I was raised with this thinking at Toyota, so these questions feel natural to me. But helping others develop this kind of thinking is a challenge. Too many leaders are too busy running around trying to fight fires or make fixes based on loose assumptions. This type of problem solving is weak at best, and surely not repeatable for long-term sustainability.
The next GTS is to Get to the Solution. If you have properly grasped the situation then this leads you to ask further questions like: What are the processes that address the gap? Then we look for the places, blocks, bottlenecks or "points of occurrences" within processes that help us understand root causes and finally, countermeasures. As mentioned above, this is PDCA. If we are able to complete this process by practicing the last GTS, and our countermeasures are effective, then we want to proceed to the fourth and final step: Get to Standard.
Knowing what to do as a leader can feel like an unwieldy question. But consider GTS?. It's not easy, but it is fairly simple. The challenge is less a matter of being lean than it is asking ourselves if we are really practicing lean thinking—a way of thinking that starts by going to see, grasping the situation, getting to a solution, and ultimately, getting to a standard. It won't feel natural at first, but it can be learned!
Until next time
Tracey Richardson

Saturday, July 6, 2013

How can lean be sustained across a decentralized group geographically spread out?

Hello everyone,
This week's post is shared from TheLeanEdge.org, where  I participate monthly.   The question posed was:

How can lean be sustained across a decentralized group geographically spread out?-  A consumer-facing made-to-order manufacturing company has a significant service presence (sales associates, designers, customer service reps, logistics associates, installers) distributed across a wide geography in a somewhat decentralized organization structure. Each of the groups listed above is run by a different functional head. Sustaining Lean gains in a single plant is challenging enough -- doing so across several dozen groups spread across North America is tougher still. What advice do you have for the managers of this company?

My response:

When I internalize this question and visualize it, I see that infamous PowerPoint slide we all have used or seen that shows arrows moving in various directions with no rhyme or reason. We usually refer to it as rather chaotic or difficult to sustain any order when everyone is dancing to the beat of their own drum. I think its very important for organizations that are somewhat decentralized to understand the importance of “seeing through the same lens” or having a “guiding beacon” to always attempt to know which direction to point the arrow. I’m not saying this is the only answer, but its a start in the right direction-no pun intended :) . As my other colleagues have mentioned there are so many aspects of the recipe, from people development, leadership responsibilities, understanding the value stream, and how do all the functional silos work together the best way possible knowing that everyone is naturally silo’ed but how can we minimize the separation and bring in the common lens.
How I was taught was first understanding what are we trying to accomplish? How will we get there? And lastly, why is it important? I often share this as the WHAT-HOW-WHY model. Think of the “what” as expectations, ideal state as some have mentioned or leader standard work which cascades downward to processes. If people understand these aspects it begins to set the foundation to bring harmony to the arrows. I think the why is the most overlooked aspect of an organization. One of my favorite questions to ask – Why are you “doing” Lean? What problem(s) are you having that Lean is the answer to? Many use Lean and feel every tool “must” work or be force-fed because its part of the Lean tool box. I often share with folks even within Toyota not ALL the tools worked in certain areas. I experienced that first hand in Plastics where one piece flow wasn’t always an option with mold changes. As an organization we often forget to tell people the purpose behind Lean and how we mold it to fit best in our own business processes. Until that aspect understood it never gets past anything more than short-term gains. There has to be a certain level of consensus and buy-in vertically and horizontally per organization/plant or the arrows will always veer off on their own.

As I was taught at Toyota our values and principles were key in getting us to understand “the what-” internally it was a thin green book called “The Toyota Way 2001″, it gave us “tangible actions” as leaders to know what was expected of us. For example, Go and See, Respect for People, and Continuous Improvement were 3 of 5 of them. These were things we have to “live” daily, in other words it was our job not an option or choice to do. The Go and See facilitated some of the aspects Mike Rother brings up with the ideal state, current state and target conditions (gaps). As Jeff Liker mentions you break these aspects down into smaller pieces and manage through problem solving and identifying processes that aren’t meeting the expectations.

I feel the common thread that is often missing with organizations that are in a situation of decentralization (which are more than we think) is Hoshin Kanri or Strategy Deployment of the Key Performance Business Indicators. I believe this “thinking” along with solid values and principles allows us to move the arrows slowly in an upward direction towards a common goal which allows us to all see through that lens.

At Toyota they have plants scattered all over the U.S. (and world for that matter) which have different takt times for each, different products, standardized work and customer expectations. There is a North American head quarters that attempts to bring harmony across all those plants in the U.S. which make different product with various options depending on demand. The common thread I always experienced was expectations that were cascaded from headquarters to each plant. Here is how it would look:

Business vision or True North (from Japan) —->North America goals for all the plants—-> specific Plant goals—-> Department goals —-> Section goals —-> Team goals —-> individual process standard work (plant to process)

I’ve also described this as a Line of Sight. If we can have a guiding beacon (Hoshin) then we can begin to break down the barriers that keep the arrows in disarray versus in alignment. If we can create this common goal, change leaders actions to meet an expectation we have set ,and then align these with key performance business indicators that we can eventually make visual to everyone; then it begins to give a glimpse of hope to organizations that face this issue allowing them to work together for the common goal. As some have mentioned this can’t be an “add-on” mentality, it must be “the way we do business” or how we think as an organization. Similar to the dieting analogy or working out, its the process that gets you the results (weighing on the scales-lagging indicator). We are just as concerned with the leading indicators of your work processes that align with business goals from process to plant. I’ve often said its simple, its not easy!
 Until next time,
Tracey Richardson

Sunday, June 2, 2013

How Lean is a "Lean Start-up"?

My post comes from posting on theleanedge.org -

So how “lean” is a lean start-up? What an intriguing; yet, difficult question to answer- there are so many tangents of this in my opinion. For me I suppose it has a lot to do with how you or your organization defines Lean itself. It’s amazing when I ask this question across various industry’s the answers I get that are so far away from the true essence of Lean, no wonder its only a short-term “project” for many- start up or not. I think this within itself drives the thinking of an organization and how they define it and see it, especially if they are on the journey, or have just begun. If I were to look at an organization I might say “you are not Lean”, but what does that mean to them? It’s all in the eye of the beholder, right? Lean is a nebulous thing in their minds or a destination they are trying to reach if not explained correctly as to why they are doing it. Again goes back to how we define it. Many ask me how do I define it personally- it’s simple for me really – Lean is about adding value from order to customer through developing people and their ability to see non value added actions within that entire process regardless of what you provide to your customer (I’m not always describing manufacturing). So in short- Lean is about people and their development/alignment, at least that is what I was taught. The beauty of that is that the outcome is seeing people grow individually which supports the growth of the entire organization across all function areas vertically and horizontally.
My personal experience with start up’s are priceless lessons because I got to start up the first Toyota plant in North America. Was the start up phase Lean? I will say absolutely not! It was that way on purpose, our trainers knew what they were doing when they “padded” our workforce in the beginning. It was called opportunity! We LEArNed through countless hours of looking at processes with our trainers and leaders looking for opportunities to improve the standard against a current state. At the time we didn’t have a clue what Lean was, we just knew we had to meet certain expectations and the accountability for that was high! Its amazing when you remove the labels and stigma of something that is so hindering in ways how you can actually see much more clearly the essence of raw discipline. I can remember within the first 6 months of my time we went from 30 people in our group when I hired, to 18. Were we working harder? No! Were we working smarter? Absolutely! Were we learning and being developed? Yes! We didn’t see this as a negative, it was a reward for our ability to “think” and be empowered to improve it again. Everyone can do this, there isn’t a special decoder ring in a cracker jack box that made us that special, it was the ability of an organization to respect their people and “grow them”. I was a true example of a “home-grown” leader at Toyota.
They developed us and conditioned us to always ask questions based on standards to current state, that pure essence kept us perpetuating the thinking until it became the “norm”. I reflect back now and realize it was all really simple when you have leaders aligned with expectations, discipline and accountability that were first and foremost. It wasn’t Lean, it was our JOB! Imagine that concept! It wasn’t a choice, option or convenience thing, it was how we did business everyday, we all lived it because it was who we were. The infamous words we all know–WE ARE MARSHALL!! Well “WE ARE TOYOTA”, was something we all took pride in, there was a spirit of being part of something only the ones there could truly grasp- we were special because they made ordinary people do extraordinary things just by listening, leading and learning at our process. We “leaned” out ourselves and in time we did it with less and less guidance as our trainers made their way back to their own jobs in Japan. This was the goal all along, they were just the conduit to make it all happen. It’s truly amazing how they created this culture with people just by focusing on how we thought about gaps. It wasn’t rocket science, but some see it that way unfortunately.
So when I look at organization’s today I see a bit different situation than our “greenfield” but I never let that be an excuse for them to say, well “you had it easier. I didn’t always consider “greenfield” being such a dream since I lived it, I guess the grass isn’t always greener as they say—literally :) . Current organizations have the same gift we had at Toyota and that is opportunity. I guarantee if you look at value streams within your business you will see the same “padding” we had starting up. Every place I go has a choice to recognize the gift there in front of them, it’s theirs to decide upon how they open that gift. The reason I believe no one comments or connects well with the “lean start-up” conversation is because they don’t want to admit they don’t have the discipline to be accountable for something really simple when it comes down to it. When you lower the water the rocks there are about results versus process; most organizations are so result oriented that they won’t sacrifice an ounce of it for the process of developing people and taking the time to be at the gemba. One lesson my trainer always said that was a “secret” — If you focus on process and people, results are your outcome. Many struggle with that analogy and aren’t willing to give it a try in fear some “number” will suffer so it becomes a convenience mentality which never sustains. I truly believe Lean is opportunity and you make that as robust and you can through development of knowledge of your people. If your definition of Lean is- Less Employees Are Needed, then I will just say you might as well stick a fork in it before it gets started- it’s not going to sustain and your people will just “exist” to get your results and they become numb to the endless work-around’s it takes to “get it done”.
So maybe the question isn’t how Lean is your Lean start up, but perhaps how valuable are your people and their ability to recognize the order to customer value stream and the non value added aspects in between. As they said in the movie “Field of Dreams”- “If you build it they will come”. I tend to think- If you develop them results will follow!
Until next time,
Tracey Richardson

Saturday, April 27, 2013

Where to start with Hoshin Kanri (Business Strategy Deployment) in a not-yet-lean company?

This post comes again from participating in the dialogue at theleanedge.org by Michael Balle'.

The question of the week is:

Joel Stanwood: Where to start with Hoshin Kanri in a not-yet-lean company?
A mid-sized manufacturing company is finalizing its strategic plan and believes that it is time to begin Hoshin Kanri. The company is not currently operating as a Lean Enterprise -- functional silos create significant amount of waste which results in poor product/service quality and high cost to serve. Additionally, different departments and regions of the company are "pulling in different directions." What advice, resources, and lessons learned can you provide to the managers of this company to successfully organize and deploy Hoshin?

Thanks Joel for your question, I think it is one that many can benefit from. Based on my experiences with various industry I feel that this is a key area that is often discounted, and somehow organizations think through osmosis that the people just somehow know what they should be doing on a daily basis that cascades upward to “something” but not always a defined strategic business plan. I often ask the organizations I visit what their true north is and/or business indicators and to my surprise a common response is the”deer in headlight” look. If they do respond, most have a different interpretation of what it is, and how it pertains to their particular department and their role in it. Most people, unfortunately, react each day and all the standard work they know is to create a “work-around”.
For me personally, I’m not sure there is a specific “secret recipe” that meets the needs of every organization instructing them in a “standardized-linear- or a “cookie cutter” approach, as to when the different aspects of Lean thinking should take place within their journey. Many would like me to wave a wand and I truly wish it was that simple, I do tell them “it is simple, it’s just not easy”. I personally feel that each company has to create what is best for them, translate each business goal and ensure there is buy-in and understanding along the way as to why we are implementing certain tools that allow us to think and do business differently that meets customer need. The more direction you can give your people “vertically and horizontally” across the organization sets people up for success because it creates a line of sight that cascades the business goals from a 500 foot level up (process) to the 50,000 foot level (company true north). So vertically cuts upward to the CEO level to the process level and horizontally cuts across all the functional areas, this thinking is how you begin to bring the directional arrows upward to a true north versus the power point slide we have all seen with arrows going aimlessly in many directions with no rhyme or reason. I tend to call it “seeing through the same lens”. this process can drastically change the way you do business and create an internal infrastructure that fosters the develop of people and their role in the company. When you have these “quote” – silos, you tend to hear the words “we and they” versus “US”, US implies teamwork and direction that allows the value stream from order to customer flow with the best success for value added processes and development of people.
It has been my experience even within Toyota that all functional areas naturally have silos, it was an accepted aspect of our culture because we all had different roles and expertise we were asked to perform. As long as we knew the expectation and tried each day to work towards better processes of our internal and external customers then there was no problem with silos. Where it becomes dysfunctional is when there is an internal competition for blame when something isn’t meeting expectations or a cohesiveness within the silos to find root cause as a group. I jokingly refer to it as the “5 who’s and the root blame”. For example, manufacturing, engineering, accounting, and human resources are all natural silos and have their specific processes that “should” support the greater good of the organization. Again by nature this will happen and this is perfectly acceptable as long as each functional area has a directional goal towards a “true north” or vision that has cascading key performance indicators (KPI’s) such as quality, safety, productivity (delivery), cost, and human resources training and development. (Q, S, P, C, S, HRTD). So if there was business goals such as improve cost by 10% across the organization then I was taught to look at it in the following way at my time at Toyota and also how I try to guide organizations to think in regard to your question above. If this process is explained and rolled out properly with buy-in it avoids the dysfunction described above.
So the process I was taught by my trainers was the plant (TMMK) was given the Hoshin Kanri goals from our North American headquarters which was driven by Japan’s (TMC) goals (KPI’s) for us. Each plant in the U.S. was then given their yearly KPI’s (Q, S, P, C, HRTD); once the plant got those then it began to cascade downward with an understanding within each department how to meet those needs in order to meet the plant needs. I often thought of it or refer to in my sessions as “getting a finger on the pulse” in any area at any time through visualization/visual management of what should be happening versus the current state. More simply put- Plan versus Actual. So if cost was a focus each department looked at their cost and cascaded that downward to each group within that department, so for me that was the Plastics department cascading it down to my headliner group. Once I had the goal for my group I cascaded it downward to the teams within my group and then by process. So to try to visualize this based on how we were taught to cascade the goals in a “catch ball” viewpoint- take a look at the example:
50,000 foot level – Global goals
25,000 foot level – North American goals
10,000 foot level – Plant goals
5,000 foot level – Department goals
2,500 foot level – Group goals
1,000 foot level – Team goals
500 foot level – Process goals
This is what creates the line of sight to the Strategy deployment (Hoshin Kanri) based on what the customer needs us to be and how we raise the bar on ourselves at each of these levels 1-3-5 yrs out. I often ask several questions along the way from the process to the company goals that help me and others “link” themselves to the KPI’s.
1. What is my role in the organization?
2. What is my direct work responsibility with that role?
3. What is my jobs purpose?
4. What are the business goals that guide my jobs purpose?
5. What is the company’s goals (true north) that I’m contributing to?
This is kind of a individual check and balance process to ensure that people understand that they are an integral part of the process that allows the silos to work together as a team understanding how each are a very important piece of the entire pie that creates the recipe for success. If my true north states (an example) – Customer first attitude, with the highest Quality, at the lowest Cost, with the shortest lead-time (P), in the Safest Manner, all while respect all their people (HR). Notice this encompasses all the KPI’s and allows each person in regard to their area (or silo if you prefer that), know where they are in regard to the expectations. If you truly look at the value stream to the order to customer process and align the horizontal and vertical aspects of your organization then its a perfect countermeasure for creating an infrastructure (culture) that breaks down the silo thinking and can truly align the organization if you have the discipline and accountability to focus on processes versus 100% just results. I truly do not believe you have to be totally Lean to implement this thinking, if anything it will begin to guide you to asking specific questions and start to develop problem solvers at each level because processes start to become defined. It is a slow trickle effect that can give you small successes to gain consensus that this is a successful way to think and do business. It’s ALL about people and fostering their ability to think we just have to give them guidance, and coaching daily reminding them of their line of sight to the business goals. Simple huh? :)
Until next time,
Tracey Richardson

Saturday, April 20, 2013

How do we see deviations as a starting point for "Lean" improvements in a non manufacturing environment, and not put pressure on the workers or an add on feel?

My latest post comes again from theleanedge.org (Michael Balle's site), you can take a look at other answers to this month's question which was:

“In a Lean environment we want to be able to see deviations as a starting point for improvement. This requires a transparency that in office environments is often seen as ‘increasing pressure on the workers’. What are your thoughts on this? What is a good way to find the causes of this mental model and how can we deal with it?”--

My answer:

It’s funny (it’s really not), no matter where I go to teach or what industry I’m in, there is always several folks in the group that define Lean as “less employees are needed“; this is a joke of course, but is it?   Art refers to it as something , I’ve heard many different types of analogies in my tenure as a trainer, I always ask why do we have to call it anything?  Is it necessary, could that be part of the program that labels get formed based on misunderstandings of intent? Who can really say!   To me it boils down to an essence – failure of purpose.  I think before any industry or functional area attempts to learn Lean Thinking, you must first gain the mutual trust and respect Pascal refers to.   In some of my past posts and even in the classroom or at the gemba I refer to this as the “what-how-why” model. What am I doing, how will it be done, and why is it important?   Whether you are in an office environment, manufacturing, engineering or accounting failure to properly create the “mental model” we desire is the culprit.   I think an office environment tends to be less linear and often tagged as more difficult, but when you think about it I ask 3 questions-
1. Where you work are there people?
2. Where you work are there processes that create outputs?
3. Where you were do you have problems?

If you answer yes to these then I truly believe that purpose can be translated correctly where the misunderstanding diminishes and solid mental models can be created through mutual trust and respect and utilizing the power of your people’s ability to think.  That can easily be solved by giving them the capability to seeing abnormality to standard and explaining why they need that.
I enjoyed Jeff’s example, sometimes they are the best way to tell a story about an experience so I will share a very unorthodox “lean type” example with you that was my very first lesson as a trainer outside of my manufacturing world at Toyota right after I left my Group Leader role.   I was asked to come back to Toyota a few months later to join a project they were working on involving the local school system in the county.   This project came about from hundreds of individuals calling in to our Human Resources department at TMMK asking where could they “learn” the skills that it takes to get through Toyota’s hiring process (some were not meeting the expectation and were frustrated they couldn’t get hired).   So a long story short the TMMK plant spoke with the local Superintendent of the school system discussing with them that the competencies TMMK looked for were perhaps not being taught any where so either you had the experience, or initiative to learn or not (it was pass or fail).  So they though, why not try to embed this in our schools to teach our young children these competencies employers are looking for.   Toyota looked for 5 competencies in their hiring process they were:
1.  Teamwork
2.  Personal Initiative
3.  Listening Skills
4.  Problem Solving
5.  Leadership qualities

There were several discussions about gaps in certain aspects of our education system (soft skills or what I call the people side).  So a partnership formed with TMMK and the local county school system, they agreed to send 25 teachers to our quality circle training course. (Yep, I know what you are thinking- me too back then).  At that time the course discussed Meeting Facilitation, PDCA, and A3.   I will have to admit when I thought about teaching The Toyota Production system “thinking” in school systems, at that time in my career, I was like “what??? how will this work”?.   I struggled with making the translation myself much less teach it, this was in 1999.  After the Quality Circle class the teachers came out of there with a “deer in the headlight” look and very confused as to the “purpose” as to why they were asked to learn this.   I’m summarizing for the sake of a 3 year story for me, but needless to say we (Toyota-TMMK) thought if we just thought the teachers how to problem solve and conduct a meeting, then these skills could be transferred to the students, thus eliminating our gap in the community in the future.  Easy, huh?  How do you think it went?  Well various things were “assumed”, (that is what happens when failure of purpose is overlooked).  Some of the people in the school system immediately thought Toyota was trying to come in and “run” the school, some assumed we were in there to recruit little future “Toyota’ites”, as I reflect back on it all its a classic example of going into someone’s environment trying to make change without an understanding of why it is important and linking it to what they do and engaging them in a way that a threatening tone doesn't evolve.
Recognizing that we had a gap in understanding we had to “re-group”, it didn't mean we gave up, we just went it from a different approach/angle, we watched, we learned, we listened, and understood their viewpoints before we discussed our own, we were trying to build mutual trust and respect  relationship with a group of individuals that didn't see the gap in the same way we did.  They had standards based on the state of KY they needed to meet and we couldn't come in as “non-educators” and tell them how to teach people ”soft skills”.  This process of “nemawashi” – buy-in took several months.  We decided to work with a smaller group and both sides ”listened and learned” simultaneously.  This was a priceless experience for me as I reflect back 14 years ago to how it made me see this “lean translation process” differently.

In short, I worked with teachers for 3 years, we “enhanced” their curriculum embedding problem solving and people skills that engaged the students to think about their work, but just a bit differently than they were used to.  We assessed their progress as we would folks going through the hiring process, it was amazing to see the parallel.   I /We built relationships with the students, teachers, principals, and administrators in the KY Department of Education.   As time went on progress was being seen, to Pascal’s point and Jeff’s I believe we were starting to have the capability to visualize aspects in the classroom based on student performance and learning, they were becoming measurable, the word started to spread quickly that TPS works in schools and our children were learning to their need similar to just in time, we were learning how to differentiate instruction based on student differences (leveling) versus teach to a norm all based on these competencies Toyota looked for in employees noted above.  It was coming together and to our surprise we got a million dollar federal grant (with the help of Toyota) to spread this activity across the state.  It was a 3 year grant.   So we were effecting the classroom, teaching styles, school and central office processes- similar to a parallel of roles cascading in an organization meeting a customer need.   We introduced Hoshin thinking and cascaded that downward, it was amazing to be a part of it and watch the light bulbs come on because we figured out a way to come into a world that was so much different than manufacturing but translate it so people understood the purpose of children learning to think differently.   It had nothing to do with Toyota at this point, we were enhancing the knowledge of children regardless of what they were interested in being in life.  This was huge!

By the end of the 3 years as I traveled across the state of KY from grades 1-12 and even secondary schools, I had embedded myself into the school “culture” that many educators didn’t know that I wasn’t a teacher, that was when I knew I was part of the team and I had become a servant leader to them with my purpose being to engage them by listening, gaining buy-in, understanding their processes, and determining how to teach in a way that fostered development and learning for the greater good of our customer , which was the student, not Toyota’s hiring process (that was a potential outcome but not our first purpose now).  Toyota was giving back to the community and state and to this day I am still friends with several educators I trained to assist me in this program that was called QUEST – (Quest for Useful Employment Skills for Tomorrow).  This program later evolved to the Center for Quality People and Organizations (CQPO) where I worked with Mike Hoseus, the executive director today, where we further developed programs that enhanced the teachers ability to translate people or soft skills, problem solving and teamwork to our students giving them a greater chance to perform in our ever-changing world today, to this day it still is in existence in certain schools and some teachers went down as pioneers of change, I was blessed to be a part of something so evolutionary, and to think that in the beginning it was a very rough road with major resistance.
When I saw this question posted this past week, it took me back to this time because in its own way it describes the exact thing that we all deal with, and if you pause, think, listen, and explain the “what-how-and why” we are embracing change, then I believe your odds are much better for success when your people understand purpose.   My time in this program proved to me that Lean thinking can be translated in an area I personally thought (at the time) was going to be virtually impossible.   Again, Toyota proved to me that they taught me how to do things I didn’t think I was capable of, this has been my MO since I left- its been a never ending learning curve to answer this question above.   I will always continue to “listen, lead and learn”, and always gain buy-in and trust, its amazing what you can accomplish!  I will never forget it to say the least.

I hope this wasn't too far off base in answering the question, to me it translates if you can answer the 3 questions above, you just have to focus on the people side.   I always say the “people side” of lean will always trump the “tool side”, people and fostering their development and understanding will create long term sustainability and growth.  Focus on your people folks!  As Sakichi Toyoda states in the Toyota Way 2001 internal book - “People are the most important asset in your organization and they are the determinant of the rise and fall of it”.   So remove the pressure buy explaining why your change or initiative is important no matter what you call it.   I promise you it will work!
Tracey Richardson

Monday, March 18, 2013

How do you change a standard?

My next post below is from a question I answered at http://theleanedge.org by Michael Balle'.   This question this month is:
How do you change a standard? - Standards are often described as ‘the best way known to perform a certain task’. Using Job Instructions, people are trained to work according to standards. Kaizen can then be used to improve standards. In this case the ‘best way’ has changed. Does this mean everybody needs to be retrained ? If so does this imply the rate of improvement is limited by your capacity to train? Or does it imply that ‘standards are local’ confined to a small group where one is able to learn from one another on a daily basis ?
My response:
This was a thinking process I had to get used to at Toyota, we never got to “settled in” before something changed on us. At first it was frustrating, but then as the purpose was explained it became the “norm” then it was expected for us to do this without being told, you know, like our “job” imagine this :) . This was something that was evolutionary because you never were complacent to just be happy with maintaining, if you did, you were expected to “purposely create a gap”. Think about that, what type of organization makes a problem when there is none – Wow what a place! :) . When I teach about this thinking I use a simple approach that evolved out of my time at Toyota, that I have developed an acronym for called- DAMI (Define Achieve-Maintain-Improve). So many people constantly change things (thinking this is actual- continuous improvement), but I ask, do you have a standard before you change? So I just want to be clear that before we change something it needs to be written and documented so its a benchmark for improvement.
So I see this same process happening within different layers of the organization sort of like peeling back an onion (functional areas and levels), but to me the process of change is exactly the same no matter where you are (involvement of people is expected). It is first and foremost that people understand the – “what-how and why” of everything that they do without compromising any of the key performance indicators (KPI’s) of the business. So for example at the various layers you may make a policy change that effects the entire organization (more macro perhaps). I remember as we grew at TMMK and doubled our size it created a safety concern with traffic inside the plant with an increase of our tugger drivers, one of the countermeasures to that was to have – (STOP-POINT-CALL) visual signs placed on ALL intersections of the plant floor in the team member walk path. So this would be a plant-wide standard that would need to be addressed, cascaded, communicated and enforced at an individual level. So again the “what is it, how we will do, and why its important” thinking that ties back to the business. After the signs were in place it was up to all the supervisors to take us to the gemba (where a stop-point-call-sign was) to visually show us the new standard for the ”stop-point-call” process and ensure that we understood the actions expected of us. If we didn’t follow the standard after the training then we could be held accountable for our the lack of action with our human resources department. So in this case everyone did need to be trained and we never compromised production in the meantime.
** A side note that helped us at Toyota to discuss some of these “constant changes” were two embedded 5 min talks each day during our breaks that was considered company time. So there were 2 – 15 min breaks a day, 10 min was “your” time, 5 min was “company” time twice a day this; was our standard of doing business that embedded respect for people and communication. I remember many times utilizing this time given to ensure understanding of our ever-changing standards which was how we did business to stay ahead of our competition. Also we had a 1 to 5 ratio of team member to supervisor at each level so this helped with the training aspect as well.
This same process described above was used at the department level, team level and individual process level. No matter what change was made in any area we ensured understanding. It was my/our role as a team leader and as a group leader (as well as other levels) to involve people in the standard and why it needed to change when we had ideas to improve. One important thing to remember was that there was a process for changing. We didn’t have a the ability to be a renegade and change it just because we wanted to or thought our way was better, this wasn’t tolerated nor supported our teamwork value. We first discussed our idea with others that did the process to see if it made sense, then began discussing with the team leader (first level supervisor). If they both parties felt comfortable after the discussion a “trial” took place (maybe a day to a week long)- (going back to DAMI- so we are defining and achieving), to see if it was repeatable and predictable, once that was proven (using PDCA thinking with an idea) then we decided to involve the other shift to get further input, then if everyone had buy-in we created a new standard and documented it, then everyone was trained to ensure they were comfortable with the change. What is great to remember here, if you have good buy-in then there are less issues when the change is made because proper “nemawashi” has taken place before the standard is actually changed. I think most organizations may just make the change and that is when the potential issues can begin and productivity and quality could be compromised. If you follow a good process to change then the likelihood of it hindering production or key performance indicators are much less.
  I think it really goes much deeper to a discipline and accountability factor here, if you make it a standard, then it’s your responsibility to ensure its documented, understood, and practiced so the KPI’s aren’t compromised and this happens through proper training, with hopes that Job Instruction or Training within the Industry are being practiced.
I realized during my time that we had less problems in the work area because standards were set, if you look at most A3′s (PDCA theme reports), when you get to the root cause analysis section it usually comes down to 3 areas that it will fall into. Those are:
Lack of Standard
Not following a Standard
Wrong Standard (not valid to customer today)
So I remind folks to train to the what-how-why model when you make changes then there is more time to spend on proactive problem solving than reactive. A message I learned from my trainer was “never be comfortable, if you are comfortable then you are not learning” – So change it up folks, if it isn’t broke–BREAK IT!! then TRAIN it!!
Until next time
Tracey Richardson

Monday, January 28, 2013

Is there a Lean way to measure productivity?

Hello folks, I wanted to share my lasted post from http://theleanedge.org which is Michael Balle's website (author of The Lean Manager and The Gold Mine)

The question of the moment is:

Is there a Lean way to measure productivity?

As the ole’ saying goes “you can lead a horse to water……”, well you can give a person a measure but you can’t ensure it’s going to be totally value added. I think most people understand the concept of managing by the numbers or objectives it’s more common than not; if you tell me what you need and you are my boss then I will normally do what is necessary to get you that number especially if it’s tied to my performance evaluation, bonus, wage increase, or promotion (*note just because I meet numbers doesn’t always mean I deserve a promotion). I see this very often in organizations and what is amazing is people will find a way because we have been conditioned to be result driven, it’s our human nature really; the problem lies when we are asked to sift the sand to see if there is any gold there—most often there isn’t.
As always I draw from my experience and my valuable teachings from my Japanese trainers at Toyota (TMMK). I had the very fortunate opportunity to be hired before we actually ran saleable production, this timing gave me the opportunity to see how all the components (thinking) came together to determine how we measured how efficient we were in our processes while bringing the waste to the surface in order to improve and meet customer need. By doing business this way we weren’t able to mask problems so easily like many organizations do without really knowing that’s what they are doing, it’s years of conditioning “that’s how we’ve always done it!”. I often hear folks say to me, “well those processes were easy for you to do because you had a green-field situation, but we are already established (brown-field) it’s very hard to implement that infrastructure or cultural thinking” in an existing workplace. Well, I call…… I will let you be creative there. If you have time to give me ten excuses why you can’t do it (usually leadership); then to me, you can use that time more wisely and begin to look at the order to customer process and ask yourself; “how long I can sustain this current thinking we use in today’s challenging market without knowing what is hemorrhaging out our door?” It truly is scary when you do some cost translations to your key performance indicators.
Some of the numerous lessons I learned from my trainers was to understand first and foremost what does the customer need from our organization, and how does each process work to meet that. So in our case we referred to that as our “takt time”, (this was a German term actually not a Japanese term), we needed to know how fast the customer was pulling from us (this can be any service, output or product). This suggests you may have to involve other departments within the organization like sales, purchasing, engineering, and suppliers. . Was all this easy, no! Did it take discipline and accountability from our leadership, yes!
In our case we looked at it on a monthly schedule based on the past 3 month average. This gave us the information we needed to understand another key component which is machine or process capacity (cycle time), basically what are we capable of? If we aren’t capable to meet what the customer needs then should be a red flag, most organizations can’t tell you this much they just run wide open and stock inventory which looks really good on paper if that’s what you measure.
So it’s important to understand as an organization to be able to differentiate cycle time and takt time. Cycle is what it takes your process to meet the takt time (customer), they do not necessarily have to be the same based on certain factors (leveling, mold or equipment changes). In my experience working in the Plastics department we had factored in mold change time so our cycle time was actually faster than takt time to accommodate for “planned” downtime. It’s also crucial to perform production capacity studies for each process (equipment/machinery), again you must know production capability to recognize gaps to the customer need. **Please note there is a difference between total capacity; meaning I can just run the equipment 24/7 (if you are running to total capacity as the norm then common sense will tell you there will be problems meeting customer need), versus process capacity which can be a normal working day time requirement.
If you were to create an ideal state you would want to know what your customer pull is, and then purchase the specific equipment that meets that need (cycle), but always be aware that even if I meet the ideal state today, tomorrow that may change. So built in to our production system at Toyota was the ability to adjust when the customer demand changed either way, we had to build in flexibility in our processes in order to remain competitive and not pass cost onto the customer. We did this by always understanding takt, cycle, capacity and manpower for every process. Most do not have that luxury of knowing the answers to all the questions above, they may be just deciding to join the Lean journey perhaps, so then it’s time for them to grasp the current state and understand where is the waste, how can we kaizen in those areas, and what other options are possible to effectively meet the customer (manpower, equipment upgrades, or outsourcing to name a couple). If this is the journey you are going down then it’s important to have leadership on board.
Once the takt, and process capacity are understood then it’s time to develop standardized work to assist in determining the manpower necessary for production needs. Each process knowing its capability must have standard work that involves specific steps with times to complete the cycle time. After these are developed then Job Breakdown sheets are created for the key points and reasons in order to use Job Instruction training (JIT/TWI) so each person is able to fully understand expectations so they can see abnormality at a glance and recognize potential improvements as they do the process each day.
So the tool we used to help visualize the cycle time, equipment involved and standardized work was the work combination table. This was how we would know what the machine is doing and when, what the worker was doing and how much time per step, along with any walk time involved to fully see the complete cycle, this was the benchmark for future kaizen. This was done for all processes that created outputs, when you think about it, how you can do business effectively and sustain for the long-term and be flexible without understand these key components? Without them you definitely can’t measure how you are doing based on the customer’s expectation of you and be flexible to their ever-changing needs.
So what does all this mean at the end of the day? So for me as a team leader and a group leader in the organization I needed to know on an hourly basis where I was against the standard, so I had a “plan versus actual” board for each process. This visualized what I did each hour, factored in downtime we had that could have been equipment related, training related, or andon pulls etc. We also had a variable called “wait kanban”, what that meant was the Assembly shop we were providing parts to had downtime which in turn didn’t allow them to return their carts for replenishment (pull system), so instead of continuing to run and “stack” parts, we stopped. This time was not calculated as downtime, but “wait kanban”, which didn’t go against our production efficiency, it was how we did business (TPS), but knowing everything above was necessary to extrapolate all this information. So after our shift each day I was responsible for a daily report to calculate productivity for our group which contributed to a department need; which supported the plant need. This report factored in our capability, our run time, downtime, repair, scrap, delay work, wait kanban, and supplier/vendor shortages. This gave us our daily “parts per hour” efficiency rate, which we based on the expectation which gave us our productivity rate for the day. We knew every day where we fell short of the standard and what we were going to do about it the next day to try not to replicate the same problem (PDCA). This was considered grasping the problem situation or the first step of problem solving. So I often tell folks our infrastructure we had in place always allowed us to grasp the situation or give us a problem awareness at all times because we knew what was happening versus what should be happening based on Assembly pull which was determined by the customer.
Every day we managed to the customer need not a number pulled from a hat that met an objective that looks good on paper short term. If a person doesn’t understand daily expectations based on takt time, cycle time, production capabilities, and standardized work then they are just haphazardly running till the next shift comes in to take over (vicious cycle), not sustainable for long-term growth, nor can you ever understand how to improve. Although I’m describing somewhat of a manufacturing setting this thinking can be applied in any industry. I always ask folks who tell me “that works great if you make cars”, I reply by asking them if they have the 3P’s – Do you have processes? Do you have people? Do you have problems? Then this thinking can be adapted if services or outputs are being created and a customer has an expectation.
Until next time,
Tracey Richardson

Sunday, January 6, 2013

How to effectively establish Kaizen Promotion Offices (KPO) in Organizations?

Happy New Year to everyone, welcome 2013.   Its hard to believe my blog is now 4 years old, boy does time fly when you are on the road learning about Lean :).

My next blog post is shared again from http://www.theleanedge.org hosted by author Michael Balle'.  This week's question has to do with KPO's.   Please visit Michael's website above to get the opinions of other Lean practitioners!

The question (s): 

What practical advice would you offer to companies as they establish their Kaizen Promotion Offices? At the beginning their Lean journey each company faces questions such as:
(a) What is the role of the KPO to serve the organization?
(b) How do we best leverage the KPO for leadership development?
(c) What is optimal size of the KPO organization?
(d) What is right mix of internal / external hires?
(e) Who should the KPO lead report to?
(f) How is the KPO best organized in order to sustain Lean both inside/outside of the plant? (i.e. sales, distribution, marketing, product development in addition to manufacturing)”

MY Response:

(a) What is the role of the KPO to serve the organization? When I see this question it takes me back to when I was taught the essence behind the Quality Circle Program and how they began at Toyota (back in the 1950’s) based on Taiichi Ohno’s vision of developing his people. I remember when I was in my assimilation hiring process (learning Toyota history) they discussed the fact with us (new hires) that the program wasn’t designed to necessarily save the company money (ROI) in the very beginning; it was more so to develop people in problem solving, and their ability to set up systems to see abnormality at a glance. Of course we all know ROI is important, (and many put that ahead of people development) but if people had the ability to “think”and leaders could foster that then, well- the ROI will come. I believe that is a “process versus results”discussion that the Japanese trainers taught us if you have good “thinking”results will follow, not start with a result as the priority. So back in the 50’s Toyota was lagging behind in production capabilities in comparison to American manufacturing so relying on a person’s ability to think and make improvements was absolutely a necessity for them in those days to be successful. It was the start of how “respect for people”got embedded into the culture I believe, they just didn’t have the resources to improve with equipment or other means until later. I will say that ALL of our “off-line”improvement groups/teams at TMMK (just speaking from my experience there) were “formed”from waste-reduction improvement (kaizen events) where we would actually save enough time to reduce a person in the process; this was part of our jobs. Most companies would define that as Lean (reduce head-count or the infamous “less employees are needed”). They were let go, fired, or laid-off. If this is what Lean meant would you want to think about improvements? Unfortunately this is reality for many companies that I have experience firsthand.

So at Toyota our incentive was to reduce waste, reduce people in order to form these KPO’s (ODG’s, SMK teams (smooth motion kaizen) ESI teams (Early Symptom Investigation), Quality Circle champions, Suggestion system specialists, and Ergonomic process evaluators. I could continue to discuss many forms and sub categories of KPO’s that were created from the thinking of the people in the organization (again our job, not an event or special occasion). These positions were never created and hired by an outside person; we created them ourselves, that was all part of the incentive. These positions were opened up to regular employees as a training ground for further development, promotions, or leadership training. They typically stayed in the role from 1-3-5 years then rotated outward to continue to teach to a group or team again they led. Again respect for people at its best.
I would like to take a second and ensure that everyone that may read this or is involved with KPO’s really know how to define Kaizen, I feel based on my time at Toyota and my time as a consultant over the past 15 years it can be a very misunderstood term. Many people in an organization are labeled “continuous improvement” leaders. I ask “what are you improving and how do you know”? They often answer “we make things better”; you can see where I’m going, it can be an endless loop, like Chevy Chase driving around Big Ben (hope you have seen that movie) I think before an organization decides on creating a KPO or whatever they decide to call it, it’s essential to make sure we understand the purpose of the group hence my question why are you doing it? Why is it necessary? Ohno knew, but I’m not always sure today, organizations know and foster this basic principle. A familiar saying for many that have studied TPS, have heard, “without standards you can’t have continuous improvement.” So if you have a group that is about Kaizen I sure hope one of the important lessons taught within the KPO are “standards”,if there is one common thread I see across various industries, is the lack of standardization, so without that how can we improve or measure? So KPO’s can be non-value-added if the purpose isn’t clear, which can just create area where bad habits can form.

So one of the roles for the KPO group is to set the direction for the company’s lean journey and/ or transformation and its purpose, many people can’t define Lean properly so that must be understood as well in my opinion, again why are we doing this? It’s important as others have mentioned to have champions, practitioners, or leaders who have a little more experience in problem solving, seeing abnormality and gemba walks. I caution labeling them experts (I never consider myself one, I’m learning too much daily to be an expert, it implies I know everything; as my trainers would tell me “Tracey-san you are always “leading and learning”.) So these champions should help coach, support and direct the lean activities that align with the Hoshin Kanri or strategy deployment as it cascades downward and upward. Each individual in an organization should have a line of sight to the KPI’s (Q, S, P, C, and HR). There should always be a strategic approach to understand the impact of the KPO group including the long term impact on KPI’s, so there could be a short-term aspect that can be looked at with each problem solved and what people are learning, and a long-term aspect with the company business plan (Hoshin). If I had it my way I would say the “measure”should be on people development as Ohno demonstrated decades ago, but that isn’t always an easy sell in today’s world where results are a strong hold to process. So how do we blend the two?

I think if people, especially leaders, are armed with good problem solving skills then that promotes the ability to always see abnormality and ask why when it’s seen. As Mr. Cho always said: Go See, Show Respect, and Ask Why! This thinking should be in the forefront of every KPO’s mission.

  (b) How do we best leverage the KPO for leadership development? If I had an ideal state, or what I call my “fantasy island” moment I would get the highest leadership on board in order to start the company seeing through the same lens, speaking the same language as problems go back and forth (catch-ball) through the levels. If a senior leader is a mentor then they can ensure good habits “thinking” are flowing downward and being captured coming upward. This selected leader must be committed to the lean journey and support the activity even when it seems it shouldn’t make the cut for the day so to speak. The senior person would need to be a teacher for the other leadership team and set the example even if the “numbers” aren’t met for the day. If you decide this is important, then it stays important, otherwise the danger is “add-on”, “flavor of month” feelings start to surface and the people only use it when there is time. Everyone knows how that ends.

(c) What is optimal size of the KPO organization? I think really it depends on the size of the company and the skill level of the members selected for the KPO team. There should be a couple of champions and practitioners and this could be adjusted as it evolves (and as I mentioned above are you reducing waste to have the ability to add more headcount to the KPO). The KPO needs never ending resources and support from other functional areas of the company, like production, R&D, Accounting, Payroll, Human Resources Maintenance, and Engineering for example. Again everyone needs to be on board to create this infrastructure where everyone is seeing through the same lens (Process).

(d) What is right mix of internal / external hires? This would depend greatly on the level of knowledge and current condition within the company. An assessment of knowledge in my opinion would have to be taken in order to understand the current state (skill level). There is nothing wrong with hiring external support, but the end goal is to develop those champions so they can lead and learn simultaneously so eventually the externals wouldn’t be necessary. Even at Toyota we eventually lost most of our gemba trainers after we started production, their thinking is you have to cut the cord to learn at some time, it’s a weaning process over time based on the current state. This could take 1-5 years in some cases, if the company embraces the KPO as a priority and part of the way the company does business this time could be less. What are you willing to dedicate to it?

(e) Who should the KPO lead report to? The KPO should have direct report to the most senior person in the organization. There would need to be a senior level person that supports the daily operations as it pertains to the business KPI’s for each department and well as measuring individual growth. There should be as much emphasis on this development group as there is on production outputs. Going back to Ohno’s vision if people can think and see abnormality at a glance then there are better products/outputs. The motto for the KPO should be something like “Every day, Everybody, Problem solving”. Describing the model I learned from at Toyota it started with the President’s support and that cascaded downward to the team leader on line and floor level. Everyone knew their role in Problem Solving, we worked to develop an infrastructure that became our common language or way to do business, the leader of the KPO should foster this daily as it become a norm, but a project.

(f) How is the KPO best organized in order to sustain Lean both inside/outside of the plant? (i.e. sales, distribution, marketing, product development in addition to manufacturing)” In my experience the KPO can evolve to these different areas as people grow. It can even be different teams in different functional areas with different roles and responsibilities. For example the ODG group was strictly internal to our plant, where, TSSC (Toyota Supplier Support Center), when it began, was focused on external learning (vendors/suppliers). To me the importance lies first and foremost in the internal learning and development of people at all levels to have that line of sight to the company business indicators within their daily work. People need to know and understand what they do need to have purpose and value that tie in to a greater good, otherwise they can guess on their own why it’s important and this can be the start of a morale problem or an unaligned workplace. Once the KPO has been established and measures of process improvements can be seen and replicated through a good thinking process, then begin to take it outward slowly, sustainment and repeatability is the key, if we try to teach people too quickly without the proper learning curve and the ability to mistakes without repercussions then it can quickly lead to more bad habits (results oriented thinking).

I will always be an advocate to people development no matter how you want to label it; if you invest in your people they can determine the success and long-term sustainability of your organization. Growing people can spawn leaders, leaders can develop habits, and habits can create character which leads to an organization that would be label the “place of choice”! That’s what I had the opportunity to be a part of, priceless!

Until next time,
Tracey Richardson