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Deliberate Innovation Through Lean Product & Process Development

by Lex Schroeder
September 23, 2014

Deliberate Innovation Through Lean Product & Process Development

by Lex Schroeder
September 23, 2014 | Comments (0)

Photo caption: Joe Zekoski at LPPDE 2014, courtesy of Lean Frontiers

10:45am ET

Hello all!

I'm writing from Durham, North Carolina where I'm covering the Lean Product and Process Development Exchange conference on behalf of LEI. LPPDE board chair Jorrit de Groot opened the morning by reminding us the goal of this gathering is to "bring the right people together, facilitate the dialogue, and make sure we learn together." I'll be live-blogging what I can of the conference and be sure to follow along at #lppde2014 on Twitter. View the full agenda here. Learn more about LPPD at LEI at leanpd.org.

Jeff Liker on "Lean Product Development as Culture Change"

Jeff Liker (author of The Toyota Way and co-author of The Toyota Development System) gave the first keynote of the day and got right to the point. LPPD is about culture change, "deliberate innovation through continuous improvement." The LPPD community, he says, is moving more and more towards a focus on rapid learning cycles (something that's always been a part of the Agile community, but central to lean thinking as well).

Why is LPPD important? Once again - you guessed it - the 21st century is all about coping with UNCERTAINTY and adapting to change. Product development - and lean's focus on process - is intended to help us do that well. "We're only as good as our latest product," Liker says. While we all have competitors and everyone is out to "innovate", what makes the difference is whether or not we're out there meeting in the obeya every week, working collaboratively, getting it into our heads and our team members' heads that by talking to each other and working together we can solve that really hard problem, whatever it may be.

Liker reminded us that solving an organization problem IS innovation. Call it innovation or creativity, call it whatever you want, but effectively solving a problem is what helps us create something needed and new. 

Then he moved on to distinguish between product development and process development. There's the product (where most engineers and developers focus most of their attention) and then there's how you create it. We naturally focus less on the latter. But that's exactly where we should be focusing, on how to do the work. Great processes create great products... (Maybe we just need to learn how to get more interested in process? How to make process thinking more interesting to people? What do you think?)

"We often think of lean as a toolkit for eliminating waste to reduce lead time in end-to-end value streams," Liker says. "And six sigma is meant to reduce variability. But measuring doesn’t reduce anything unless you do something with the information. Only then is it value add."

At this point, Liker referenced the work of Mike Rother (author of Toyota Kata). Rother describes lean as “the permanent struggle to better flow value to customers.” That’s the whole reason we’re in business, Liker says, and it's permanent because it's ongoing. It never ends. This doesn't have to be a bad thing. We’re flowing value to customers or we’re not. But it requires an individual mind shift and an organizational culture change. 

Next came a bit of history and a good example of what LPPD is all about. In Ford's revitalization (read more about it here), what made the difference under Alan Mulally's leadership was that it was a product-led revitalization. "What saved Ford was product," Liker said. LPPD is about creating great products in order to create at least some stability (and stability of process) in a larger environment of uncertainty.

You want to give customers something they want and need. A customer for life is what drives stable sales. Customers want something new and better and they want a high quality product or service that is timely and something they clearly value. Once you get this, once your customer is happy, stable sales then allows for a reinvestment of resources in people, processes, and innovation. Ideally, "a virtuous cycle of innovation."

Why don't companies invest more in LPPD? To start, it's intangible, Liker says. Focusing on improving manufacturing is short-term and tangible; trying to improve PD is long-term and more complex (or perceived this way). Companies have a short-term focus on engineering costs, they want to reduce engineering hours. But LPPD is something totally different. "What we're looking for is flowing value to customers, not making people work harder," says Liker.

Another reason, Liker says, is "engineering arrogance." Engineers are inclined to figure something out by themselves (the "just give me the book and I'll figure it out!" idea) and it takes time to work more collaboratively within teams and across the organization. A lot of organizations have an over-reliance on technology, too, when more often than not it's a different way of working together that helps you solve problems more effectively and create better products, not some new software or technology.

Learning Lean (and everything LPPD) Requires Thinking About How We Learn

A good portion of Liker's talk was dedicated to the question of how we learn, a rough overview of the latest neuroscience research and how it connects to learning (individual and organizational). No wonder this LPPD stuff, or any new habit/routine for that matter, is so hard. "What we think we know is always more than what we really do know," Liker says. And learning is about confronting that gap. LPPD is about "finding opportunities to help people test what they think they know and discover what they need to learn." Where we get into trouble, he says, is when we "set a course and just go" (versus testing, learning, and adapting).

Learning new habits sounds easy enough, but our brains are bad at change. Our old habits and comfortable routines (and amygdala) keep us stuck. Doing what we already know feels good, venturing into the unknown is painful. We resist change because we fear we just won't be good at something, or - and this I thought was interesting - we KNOW we'll have to alter our behaviors/routines that have served us well until now. We just don't want to let go! When we are ready to change our working patterns, our pre-frontal cortex is what helps us do it. But it only kicks in when our old ways prove no longer satisfactory/satisfying.

So anyway, back to LPPD - and back to learning LPPD concepts effectively (working with what we know now about the brain) - Liker says the trick is getting clear on a target condition and striving toward it through iterative learning. All those small rapid experiments the lean and agile communities have been talking about forever and the startup community is talking about now, too. But making sure to do this at every level, whatever it is you're trying to improve. So there's an organizational piece here that's easy to miss if we aren't careful. And it's good to learn with a coach. We have the research now to prove that as individuals we really don't know ourselves well at all, so it's good to work with someone who can say "you're on the right path" or "you're back to your old thinking" or "hey, have you tried thinking about it this way?"

What ultimately changes behavior though? Liker says it's a) working collaboratively in all of these new ways and b) making sure to reflect on what you've learned and what you've been doing differently. Often, he (or someone he's been working with) gets asked to share the learning from one part of a company to another, or one team to another. That may be a good impulse, but it doesn't work. One team can grow by leaps and bounds and model good learning for another team. But every team needs to go through their own development process and experimentation process in order to change for the better and have it last. You have to jump in and do the work.

Working differently, learning LPPD concepts and applying them, is like anything else we struggle to learn in our lives it seems. You have something you want to change, and you do WANT to change yourself. But unconsciously, there's another part of us that doesn't want to change at all. So you need to run A LOT of experiments and you need a coach in order to actually make change happen. If you're a leader and you want your people to change, you have to change and you have to model new thinking and new habits for others.

Next up... reflections on day 1's practitioner keynote, "The Goodyear Journey to Lean Product Development" by VP of Global Product Development, Joe Zekoski.

 

Investing in Engineering & Product Development at Goodyear

1:45pm ET

Jeff Liker’s talk this morning was followed by a practitioner keynote by Joe Zekowski (VP of Global Product Development at Goodyear). At the start of their lean journey, Zekowski says their goal was "to efficiently deliver continuous flow of of consumer-relevant, innovative products and processes that align with business strategy and drive profitable growth." Or for short, make products customers genuinely care about.

So Goodyear took a look at R&D... and E&Q (engineering and quality) and decided to view these things as an investment again, not a cost. How? By focusing on developing a product to target, learning throughout their global network, and learning through rapid learning cycles (on averge 4,000 a year now).

The business problem? Goodyear had been making just 30% of their product on time. Lots of new projects were being started and abandoned. And like a lot of organizations (whether you're making tires or anything else) they found themselves to be good at managing individual projects, but weak at creating any kind of flow of projects. They couldn't select which projects to move forward. Production was congested. Plus, their product-based teams were actively competing with each other, not working collaboratively. On the process side, there were no clear processes, there weren’t enough standards, little to no governance of incoming work, visibility, or flow control. And despite all of these problems, most team members still operated with the classic "hero mentality". They were all about new technologies, but were process and risk adverse. Does any of this sound familiar?

So Goodyear focused on "on-time delivery." "Yes, we had a burning platform," Zekoski said. "But we also knew we just had to change." The change would require that they move from a pure project organization to a matrix organization.

Phase I was about creating stability, in the technology creation process and the product creation process, and then linking these back to corporate. They chose a pacemaker product (a test tire) and ran it at 80% capacity. Other leaders in the org pushed back and said, “Why do you want your guys taking 20% of their time off?” "No," Zekowski said, "I want to give them a bit of space to improve and to get it right." It was a hard sell, but worth it. Transformation is uncomfortable. 

Good Product Follows Good Processes

While lean is applicable just about anywhere, he says, particular principles were especially critical to Goodyear’s transformation: knowledge-based development and short learning cycles. More than anything, what made the difference was teams working more effectively together and getting more visibility on the work. All levels had to be engaged in the change process, he said, and empowered to improve their work. “We knew if we could get our process right the product would follow,” Zekoski said.

Culture change required leaders modeling lean behaviors themselves, standard documentation, training on lean (from outside coaches and inside lean practitioners/leaders), and – and this I thought was interesting – as much training on “what lean meant for Goodyear.” So there’s the need to develop a real understanding for lean thinking and practice, but for Goodyear it was essential that they make lean their own. Zekoski said everyone went through two cycles of lean training. The first was about listening to lean coaches and leaders (those who knew lean thinking and practice) to figure out what they needed to do. The second was about getting team members clear on what the company expected of them in terms of Goodyear’s version of lean.

When Goodyear was clear about what mattered to them and clear about what they were measuring, people naturally stepped up and helped improve the work and meet new targets. On-time delivery became the new standard and the most important thing. Today Goodyear is at 90% or greater on-time delivery. They leave that 10% cushion a) because they know they work in uncertainty, Zekoski says and b) because he wants team members to know that there are times when on-time delivery actually isn’t the most important thing. It’s about being flexible. 

Understanding Speed

In Phase II of Goodyear’s transformation, it was all about speed (single piece flow) Why focus on speed? Staying competitive is about getting out new product, yes, but Zekoski said it was also about being more agile, getting “late start benefits” and understanding the real costs of delays.

Organizationally, this meant becoming a knowledge management organization. Capturing the learning team members’ generated and used as it was being created. “You shouldn’t have to learn something more than once,” Zekoski said. A good question for any organization or group… How do we not lose the knowledge we learn/create?”

To help teams begin to work more collaboratively, Zekoski said he had each of Goodyear’s three production centers select a young engineer to select a team of six and challenge them to come up with a plan for making a tire within a week (production had been 6 months to a year). In the end, Goodyear had a 47% improvement to production time, a clear process, and were able to sustain their gains.

The goal was on-time delivery – and part of this was speed – but the goal was also to have people pay more attention to process. “Our people are extremely proud of the products we make,” Zekoski said. “Our challenge was to get them equally proud of the process by which they made them.” 

What’s next year for Goodyear? For one, continuing to develop the “One Goodyear way” (a shared organizational strategy for doing LPPD at Goodyear) and working on helping people “see red as opportunity.” Key to all of this will be top level leadership, consistency of message, continuing to view R&D as an investment, collaboration across functions, and clear communication processes (including using the help of outside coaches and acknowledging the leadership of those with lean knowledge within Goodyear). “As leaders, so many of us minimize the value of recognizing people and saying thank you,” Zekoski says. “Acknowledging people’s good work goes a long way.”

When it comes to spreading lean thinking and practice and LPPD concepts, Zekoski says we should pay attention to the people who are the most open to change. “The people who drive change aren’t necessarily the people who have been at your organization the longest or who have the fancy title. They’re the people who have the most influence.” And listen to your engineers when they say they feel over-managed. Lean isn’t about over-managing anything. It’s about creating good processes with the people who do the work and respecting their ownership of the work, too.

 

"Building as Product" - The Cathedral Hill Hospital Story

9/24 8am ET

I was delighted to attend Baris Lostuvali’s learning session, “Building as Product” Tuesday afternoon on applying lean thinking (and LPPD concepts) to a unique construction project in San Francisco – Cathedral Hill Hospital. Lostuvali first wrote about it on The Lean Post and is sharing the bigger story here at LPPDE 2014. The challenge? Effectively build a multi-billion dollar project with huge logistical challenges in one of the busiest places in San Francisco and be lean about it.

In construction, Lostuvali reminded us doing lean isn’t easy. It’s a highly complex system you’re working with, a highly regulated field, and a sensitive environment. San Francisco is earthquake territory, and you’re putting up structures that need to be able to cope with the effects of climate change. Just as lean forces us to think differently, so do these outside forces (like climate change) that are happening whether we like it or not.

Then there are all the normal challenges that come along with building a new structure. It’s about aligning perceptions of the work to be done. You’re balancing:

  • How the customer explained it
  • How the project leader understood it
  • How the engineer designed it
  • how the programmer wrote it
  • how the sales executive described it
  • how the project was documented it
  • how the project was installed… and so on

Then there’s being mindful of waste. If you look at U.S. energy consumption by sector, Lostuvali says buildings account for 48.7% (compared to industry at 23.2% and transportation at 28.1%). 

First, he and and his team studied NUMMI. More than product development per se, they became interested in Toyota’s production system. Jumping in and doing things differently required a leap of faith, he says. Like NUMMI, their goal was build a product better, faster, and cheaper. In a traditional construction project you do the following:

  • Hire architect
  • Owner and architect work together
  • Slowly engineers come into play
  • Then contractor comes into play (time loss here)
  • Then most major trades come into play (time loss here)

It’s a slow process. The entire goal for the Cathedral Hill Hospital team was to shorten the process and close the gaps. “We wanted to tell the owner they were getting what they asked for, and we wanted to integrate project delivery.”

This meant creating an integrated project delivery team and having clarity among all on roles, responsibilities, relationships. There was a lot of gemba walking at the hospital. The CEO of the hospital was involved in value stream mapping and was part of the process the entire way. Lostuvali told architects and engineers he didn’t want to see the usual materials and plans: “I want to see something different, I want more value.” They ended up using and testing some of the most advanced materials available, previously only used in Japan.

In doing the work, Lostuvali focused on three things 1) skilled people 2) tools and tech and 3) process. Learning from Liker and Morgan’s The Toyota Product Development System, these ideas (people, process, tech integration) helped Lostuvali and his team build a great product.

Organizationally, they created a flat, networked structure that still had a hub where everyone involved could go to get the information they needed. And as Lostuvali wrote in first piece for the Post, a big part of creating team alignment and a learning culture involved reading. The team (and suppliers and all key players) also spent a lot of time mapping information flow, key handoffs at different times in the project, and iterations of what the product would be.

In the end, Lostuvali says, lean (and lean product and process development) is about integrating all of the different activities of the construction process, running experiments, problem solving, creating knowledge, and working effectively with the complexities of design. He cited Jim Womack in Gemba Walks: 

“All authority for any sensei flows from experiments on the gemba, not from dogmatic interpretations of sacred texts or the few degrees of separation from the founders of the movement.”

Wise words to remember as we run LPPD experiments. More to come on Wednesday!

 

The views expressed in this post do not necessarily represent the views or policies of The Lean Enterprise Institute.
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