John Shook's Lean Management Column

Learning Lean - Collaboratively

Thu, 26 Jan 2012 05:00:00 GMT

I wish I knew more about learning. I know quite a lot, just not nearly enough. Like you, I’ve been educated – hopefully even learning throughout that process – for many (too many?) years. I’ve – again hopefully – continued to learn outside of formal “education” throughout my life, as have you, in work and personal life. I’ve also read a library full of books on just about every dimension of learning you can imagine: child development, adult learning, socialization as learning, organizational learning, the neurological science of learning, and of course the various principles and techniques of learning as they apply specifically to lean practice.

If you’ve read this far, you know by now that lean practice is in fact all about learning. At the individual level, at the organizational level. If many corners of the lean movement started out with an unbalanced focus on tools and techniques, most lean practitioners know by now that no lean effort will succeed on the operational side without success on the social side – the dimension of people working and learning together.

So, here’s an observation. Recently I was part of a passionate discussion with a high-powered group of leaders regarding the requirements of successful lean leadership. The group listed a list of things that leaders need to do to lead a successful lean transformation. The only thing I added was the following.

There is one characteristic that is common among every successful lean practitioner I have met: they love to learn. They are curious by nature, but more, they are willful learners. You could say that, as humans, we all learn all the time, right? Maybe, but here are two things to consider. First, that modifier of “willful” is important. You can usually learn more effectively if you are intent on learning from the beginning of each activity, rather than sit back to passively expect that learning will happen. Listen to your favorite athlete or musician describe how he or she attained their skill.

Secondly, sometimes we become content to fall into the more complacent frame of mind of the “knower.” It feels comforting to think you know the answer in each situation. In fact, most traditional organizations encourage such a mindset. In such settings, leaders at all levels are expected to know, to know the best way, the right way, to know the solution, no matter what comes up. While knowing things is important, such an attitude – so often so pervasive – can disregard the value of stopping to ask simply, “What do we truly know about this situation, and what do we need to learn?”

In The Learner’s Path – Practices for Recovering Knowers, author Brian Hinken explores the minds and behaviors of “knowers” and “learners.” In reality, we all switch from being learners in one instance to knowers in the next. But, the more we train ourselves to embrace the learner within us, the more … we will learn. LEI faculty member and lean coach Jim Luckman makes that distinction – among others – a key component of our intense three-day Transformational Leadership workshop. If it’s a challenge to maintain a learner’s mind as an individual, it’s exponentially harder when we are working together as a group, with deadlines looming, problems rampant, and the demand for knowing the right answer omnipresent.

It’s a challenge to do this, and that’s why lean systems (the ultimate social-technical system, where the operating processes are the people developing processes) respond to this challenge with specific tools and methods—mechanisms for lean learning. There are a handful of core lean practices whose purpose is to serve as mechanisms to enable the practice of PDCA and willful learning, notably: Standardized Work, Kata, Strategy Alignment (aka hoshin kanri) and the A3 process among others. Each is a PDCA based learning cycle – the key to learning faster and deeper in dynamic real-world circumstances is to cycle willfully and cycle fast.

Consider the story of my longtime friend and colleague Gary Convis. In the excerpt (which you can find in our lean.org A3 dojo) from his new book The Toyota Way to Lean Leadership, co-authored with Jeff Liker, Gary shares the story of how he learned the power of the A3 process at NUMMI—where he learned that his role was not to oversee and order his engineers around, but to learn how to coach them to become effective owners of their problems and countermeasures. In an interview we will post next week, Gary will expand on his use of the A3 as a collaborative process that enabled him to achieve learning and alignment among the far-flung members of the global organization of Dana Corporation.

Still, I wish I knew more about learning. And that’s why we made “Collaborative Learning” and its application to lean practice as the theme of this year’s LEI Lean Transformation Summit. We chose to focus on collaborative learning not because we think we know everything about it. Rather, we know we want to learn more about it and recognized there would be no better way to learn than to gather together with you to share the experiences of the Lean Community. We asked prominent lean practitioners with extensive experience in leading lean consortia, networks, and clubs to share their learning in the, well, collaborative learning environment that is the gemba of our annual Summit. Click here if this sounds interesting and you’d like to join us March 7-8 (in person in Jacksonville Florida or through internet streaming, which makes it possible this year for the first time for you to join us no matter where in the world you may be).

John Shook
Chairman and CEO
Lean Enterprise Institute, Inc.
jshook@lean.org

So, what are you going to do about it?

Fri, 28 Oct 2011 04:00:00 GMT

What a year for global supply chains! It started quietly, with a few leading firms taking the lead in reintegrating hopelessly disintegrated supply lines. Then came the shock of the catastrophe known in Japan as 3-11 that left automotive and electronic supply chains so devastated that they are only now – half a year later – recovering.

And then this in Saturday's NY Times: The great Chinese-led deflation in goods prices may have come to an end. Times Chief Economist Floyd Norris presents data that shows a reversal of a 20-year trend, with apparel prices rising, due to rising costs - wages, energy and logistics - in China. The China price ain't necessarily the China price anymore. Quite a watershed year.

All this has combined to kick off welcomed reform in supply chain strategies of many firms. Global purchasing chiefs, not to mention CEOs and other leading thinkers, are calling into question long-established ways of conducting activities such as sourcing, transportation, and scheduling. Indeed a rational rethinking has begun in many industries. Firms such as Toyota and GE have instituted many beneficial changes with more to come.

Most of the reforms are positive and long overdue. It is important, however, that we not swing the pendulum too far in the opposite direction again. Human organizations seem to have a tendency to do exactly that. Outsourcing and offshoring are good? Great – let's do that. Then, outsourcing and offshoring are bad? Okay, let's stop that.

Rather than another knee-jerk reaction, let's use the events of this past year to exercise lean thinking – to create entire supply networks comprised of rationally designed and steadily improving value streams. To do so, it helps to have a method.

Earlier this summer I wrote in-depth about the challenges of a lean supply chain in an e-letter. As a next step, here at LEI we asked what we could do to help firms do something about the situation. After all, there are few more critical issues than that of total systems integration of large companies in today’s economy. So, we decided to publish a new edition of Seeing the Whole Value Stream (initially published as Seeing the Whole) by Dan Jones and Jim Womack, with David Brunt and Matthew Lovejoy. (More in the P.S. about how to get downloads from the new workbook.)

What a difference a decade makes. When I wrote the foreword for the First Edition of this workbook in 2001, the business world was in the midst of its mad rush to de-integrate value streams by outsourcing and offshoring. Instead of analyzing and improving value streams in order to reduce total costs and provide better value for customers, managers were searching the globe for suppliers who would quote dramatically lower piece prices.

As it turned out, most managers didn't know what was actually going on along the messy value streams they were creating. Many probably didn't even care. The objective, after all, was clear and simple: rapid and dramatic price reductions from suppliers through a new negotiating tactic – using lowest global piece price – often called "the China price" – as a hammer.

Today the situation is so very different. Currencies have shifted, labor costs in many low-wage countries have risen steadily, suppliers in high-wage countries have declared bankruptcy, and the potential for squeezing further price reductions from suppliers is largely exhausted. A decade of endless searching for new suppliers (and squeezing existing suppliers) resulted in massively complex supply streams that are hopelessly impossible to manage.

As a consequence, managers are starting to do what they should have done in the first place: Understand and improve the underlying value creation process that suppliers share with their customers.

Seeing the Whole Value Stream provides a method for this analysis across organizations and geographies. It enables Lean Thinkers to move beyond value-stream analysis inside facilities – as explained in Learning to See – to extended value-stream analysis between facilities. More important, Seeing the Whole Value Stream explains how independent organizations – retailers, distributors, manufacturers, component suppliers, parts suppliers, raw material suppliers -- can work together to jointly manage and improve their shared value streams in order to create more value for customers (who will get their products faster and more accurately) with less time, effort, cost and chaos for every firm along the value stream. This is the revolution of Lean Thinking applied to extended value streams.

The method entails a multi-function, multi-company collaborative team that determines to understand the current state of a value stream, to envision an ideal state, and to work together toward a series of targeted conditions that progressively reduce waste, variation, and response time, resulting in lower cost and better value for the customer. The caution, however, is for us to always remember that value-stream analysis alone is not the point. Mapping is only a means for those touching a value stream to learn to see together in order to jointly pursue the vital objective: steady, sustainable improvement that benefits everyone.

This is a crucial understanding that was sometimes lost by many over the past decade: the true nature of the lean enterprise as a holistic business system. Everything is connected – so the practice of point optimization invariably squeezes costs and waste elsewhere in the system. Until we train our vision on the entire value chain, lean savings will be illusory and improvements unsustainable.

The power of lean is realized at the gemba – whether on the plant floor or at the extended value-stream level – through the way in which activities are connected. Nothing is independent. Standardized work, takt time, andon—are all tools and methods that link actions horizontally and vertically beyond one work station, enabling immediate detection and containment of abnormalities followed by quick corrective action. Similarly, the same functions of ensuring effective connectivity are performed at the extended value stream level by such methods as lean information systems, frequent-delivery milk-runs, or finished goods supermarkets replenished via upstream pull. The precise application of these or similar connectivity devices is essential to the performance of an effective value stream.

Conversely, decoupling without careful attention to practical connectivity mechanisms as well as overall configuration will destroy this key dynamic of a truly lean system: the ability to learn, to adapt. Break supply chain management, as many have, into disconnected points of lowest piece-price locations or a set of black-box optimization algorithms and you lose the ability to build rational and flexible supply chains configured as living learning systems. Ultimately this challenges managers to deeply understand how their value streams currently work and to design improved value streams that are configured rationally and are manageable and adaptable to rapidly changing real-world conditions.

So, as organizations learn how to see and improve collaboratively using the method described in these pages, they can make the great leap from shared analysis of individual value streams to shared analysis of entire value creating systems consisting of many parallel and crisscrossing streams. Such a leap toward a complete lean enterprise, aligning the energies of independent contributors working collaboratively to improve and learn systematically, is the next frontier for Lean Thinkers. Now is the time.

John Shook

Chairman and CEO
Lean Enterprise Institute, Inc.
jshook@lean.org

P.S. The new edition of Seeing the Whole Value Stream contains a wealth of new material reporting on pioneering lean practitioners who have used the principles in the workbook to actually do the right thing in the past decade. We have captured their lessons, and shared practical advice, in five new essays that are included in this edition. This new material includes pieces that reveal how UK retailer Tesco has used these principles to become the world's third largest grocery retailer, how Acme Alliance formed a successful extended value stream with its global supply chain, and how you can calculate your own true cost of location. There is much more available, including downloads of some of these new essays, as well as other resources that are ready for you to access right now.

Was Steve Lean?

Thu, 20 Oct 2011 04:00:00 GMT

I don't know that much about Apple. The only gemba I've visited are lots of Apple stores (I don't know if they're lean but they go far in solving customers' problems) and a few (far from lean) suppliers in East Asia.

The day after Jobs' death, an impromptu memorial appeared along "Entrepreneurs Walk of Fame" in front of LEI, at Kendall Square, Cambridge MA.

Since his death, comparisons of Steve Jobs with great innovators and industrialists have been plentiful, with Thomas Edison and Henry Ford mentioned most often. The Edison comparison is off the mark, since I consider Edison as an inventor first, and businessman second, with little interest nor aptitude for working the bridge between his inventions and commercialization.

Though known as innovators, the secret to the success of Jobs and Ford was not that they actually invented anything like light bulbs. Ford didn't invent the automobile. Nor did he really invent the idea of flow production or interchangeable parts. Likewise, Jobs didn't invent the PC, the graphical interface, the music player, music, the telephone, the tablet PC. What Jobs did, like Henry before him, was put it all together as a total package. And the packages they developed were innovative and complete beyond imagination.

Instructive parallels between Jobs and Ford come easily. Ford’s critical role in the history of lean thinking is well established – he was the first to achieve sustained flow production on a big scale and flow production is the operational aim of any lean operating system. Ford became the richest, most famous industrialist of his time through introducing a breakthrough product. But, what was truly revolutionary about Ford’s achievement was that he packaged his breakthrough product with an even greater breakthrough production process and business model.

Both men were also renowned for their infamous flaws. Demanding, abusive, confident to the point of being dismissive of the views of others – not exactly embodying the all-important lean principle of "respect for people."

Jobs and Ford shared an unrelenting pursuit of improvement – as long as they were in charge. Daily kaizen practiced by everyone was a hallmark of the approach of neither; they didn't necessarily value the views of the little man, certainly not of the workers who built their products. Ford is applauded for supporting his workforce through such grand actions as instituting his famous $5 per day pay and establishing the Ford English School to provide his workers with needed education. But those moves – while completely laudable – were mostly self-serving (nothing wrong with that, of course). He needed to attract workers in numbers never before seen. He had done the math and knew he would have no problem paying the unprecedented day rate. The fact that the workers could then afford the products they produced was a nice plus. As for the school – workers learned English and even American manners so they could be better citizens – from Ford's standpoint he was able to attract new (documented, I wondered?) immigrants to work effectively on his assembly lines.

One of the more interesting parallels between the two men can be found in their supply chain thinking. Ford became the most famous proponent of extreme vertical integration. Vertical integration was in Ford’s view a way to extend flow from end to end. Note, however, that Ford never extended the integration to dealers, as Jobs later did.

Similarly, Jobs famously kept far more operations in-house than anyone in his industry. He did hardware design, software, operating systems, web services, consumer devices, even retail, insisting on seamless integration throughout. And he held to that approach during an era when it was thoroughly discredited within his industry, and beyond, a time when academic theorists, consultants, and industry practitioners all preached the virtues of greater outsourcing of operations to focus instead on a few core competencies. (Interestingly, the Macintosh was first produced at a new state-of-the-art facility – reportedly using "just-in-time manufacturing" – in Fremont CA, walking distance from the NUMMI plant, starting in early 1984, exactly the same time Toyota and GM were preparing to reopen the old GM factory there.)

Regarding the production supply chain specifically, Jobs - unlike Henry Ford - did not try to keep his component manufacture in-house and is usually dismissed as simply following his industry's model of chasing lowest global piece price. Actually, however, Jobs followed a modified vertical integration model not at all unlike Toyota. Toyota followed neither the extreme vertical integration model of Ford in actually owning his suppliers nor the modular supply model of Dell and others of shopping contracts around to the lowest bidders. Rather, Jobs chose to work closely with a small number of suppliers with whom (as I understand it) he would develop close relationships. This approach flew directly in the face of the Dell model which was the darling of investment analysts and MBA professors. Not unlike Ford's actions with his workers, Jobs motives, weren’t altruistic; his objective was control of the situation.

That takes us back to that charge of the most "unlean" of practices: Jobs' apparent lack of respect toward the workers who built his products on the other side of the world. While structurally Jobs' supply chain had striking similarities with Toyota's, in the case of the latter, great effort was expended to extend respect in the form of engagement of all employees, including factory workers. No old Fordist "check your brain at the door" -- engagement of the entire person in daily kaizen was encouraged and expected by Toyota.

But, the most thought-provoking parallel between the two men was in their approach and phenomenal success with product-process innovation. Jobs, like Ford, was convinced he knew what his customers needed better than they did.

Ford is often quoted as saying: "If I had asked my customers what they wanted, they would have said a faster horse."

Similarly, from Jobs: "You can't just ask customers what they want and then try to give that to them. By the time you get it built, they'll want something new." Jobs liked to quote Wayne Gretzky as pointing out that you don't skate to where the puck is, you skate to where it will be.

Both men made decisions based not on market research or customer feedback but a vision of what their products would do for people. They were solving for customer need, not want. By the way, Toyota also traditionally put more product decisions in the hands of chief engineers, relying much less than competitor companies on formal market research – no focus groups, please!

And, interestingly, products introduced by Jobs as well as Henry Ford and Toyota chief engineers were phenomenally successful, less because they introduced breakthrough technology but because they left out unneeded technology to create simple, user-friendly (which would have been said of the Model T had the term been around then) products and customer experiences.

Ford's Model T was already a huge success before he figured out how to make masses of them cheaply with his assembly line. In addition to affordable personal mobility, the Model T provided a deeply personal connection with its users. It was personified, given names, treated like a member of the family. There is a lot in common between the human-like bond created by the Tin Lizzy with its hand crank starter in 1907 and the Mac with its simple cursive, lower case "hello" start-up screen only 80 years later.

Steve Jobs and Henry Ford are important not because of any specific technical invention. Far more importantly, Jobs in his era and Ford in his grasped the social and technical situations of their respective eras so deeply and thoroughly that they were able to integrate product, process, and even business model in ways that were transformative for their customers, companies … even the world. One of Jobs famous quotes was, "Stay hungry, stay foolish." Never be satisfied, always have fun. Sounds pretty lean to me.

Of course, whether or not Steve Jobs was lean is not an important question. But, how we think about that question may say a lot about what we think lean is. So, what do you think – was Steve Jobs lean?

John Shook
Chairman and CEO
Lean Enterprise Institute, Inc.
jshook@lean.org

PDCA at the Plate

Tue, 09 Aug 2011 04:00:00 GMT

Forgive me, non-baseball fans. But, it is the season.

Readers of mine know that I like baseball and find many parallels between it and lean thinking. In other words, I see a lot of good lean thinking in baseball. [See "Managing to Pitch with PDCA (Pitch-Defend-Catch-Adjust)" and "You Gotta Have Wa"]

So now I live in Cambridge, essentially part of Boston, home of the Lean Enterprise Institute. And home of the Boston Red Sox baseball team, who just hosted their rivals, the New York Yankees for a three-game series. Amidst all the media coverage was a great quote from new Red Sox first baseman Adrian Gonzalez, who has some interesting lean views about batting.

We know that "lean" is all about plan-do-check-act (PDCA). The challenge we all face in our everyday work is to answer the question, How do I do PDCA here, now.

I like to remind folks at every opportunity that PDCA begins with ... "P." So, you can't do PDCA without the P (and the D and the C and the A - the P alone will, of course, get you nowhere). Now, check out this observation from Adrian (forgive me Yankees fans), who has a clear plan for every at-bat:
"... even if it's the dumbest game plan in the world, at least it's a game plan, and I’m going to go to the plate and try it. I'm willing to lose with that game plan. It's a game of failure, and I understand that."

Interesting. His approach is reminiscent of Edison's great observation: "I haven't failed - I've found 10,000 things that don't work."

If baseball (and surely football or soccer is no different) can be seen as a game of failure, could that insight shed useful light on our attitude toward business? If we are focused on learning through each PDCA cycle - win, lose, or draw - then the only real failure is failure to learn. Think of your own sports analogy, but maybe business isn't so different from baseball.

John Shook
Chairman and CEO
Lean Enterprise Institute

P.S. By the way, Adrian's failure rate at batting (at getting a hit) this year is about 65%. So, he fails most of the time. And that's easily the lowest failure rate (and possibly also the highest learning rate) in Major League Baseball. (Read more about his approach in this Boston Globe article by Charles P. Pierce.)