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 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

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