Greg captures a concept in 183 words that entire books have utterly failed to explain.
When we are trying to solve a problem, there are always people involved. And people have positions, feelings, and are always emotionally tied to this-or-that outcome.
It is critically important to find “The 3rd Way” when working on a solution.
. . . making good decisions required everyone’s complete commitment to dealing with harsh reality.
This produced yet another counter-intuitive aspect of A3 management: respect through conflict.
Organizations that confuse “nice-nice” with teamwork end up paralyzed and frozen in place the moment there is disagreement. No further intellectual growth appears, and they had better hope they are far enough ahead that their competitors won’t catch on.
I have already used more words talking about Greg’s post than he spent making it.
I’m a couple of months late picking this up (it was published in September, and reported by Greg Eisenbach with the observation that “nothing is listed about talent.” ). But I think it is relevant here because Joe Freil’s predictors of excellence in an athlete translate directly to business performance. Only the context is different.
Motivation – do you want it? The key words are:
This goes well beyond lip service to goals.
Yet, all too often in business, lip service goals are what we get. But organizations that are truly successful and it it for the long haul are motivated by something intrinsic, something more than the platitudes of “creating shareholder value” or other committee-created “vision statements.”
Discipline – a rare commodity in business. The discipline to understand the long-term vision and work incrementally to get there vs. chasing after the short-term gains is the first thing I think of. Even tougher is to demonstrate discipline when times are good. It is easy to hire like mad and sacrifice sustainable margins for short-term sales. It takes discipline to develop a long-term steady growth plan and stick to it.
Confidence – Although this is speculation on my part, I have developed a sense over the years that what we deem “management resistance to change” is actually a lack of confidence. Leaders, and the organization, are simply not capable of performing any better than they believe they can. When I really listen to the language of resistance, the things I hear most often are how “we are different” (or how the examples of excellence are different) in some way that justifies not doing any better than they are now. I have even seen this internally when one part of the company starts to out-perform the others. Even more incredible is the response to turn against the outlier and tear it down.
Focus – I am going to quote Joe Friel here, because I can’t think of a better way to say it.
This could also be called purpose; the athlete knows where he or she wants to go in the sport. Daily training is a purposeful activity that will lead to excellence. Each workout (and accompanying recovery) is a small building block that eventually results in excellence. But you have to take it one step at a time, which brings us to the last predictor, patience.
There are a number of analogies here. Purpose is the obvious one. “Daily training” to the athlete is the process of building, and sustaining, capability. At the pinnacle of “lean” are companies that look at everything they do as training to do it better the next time. They evaluate how they carry out their activities, and evaluate the results. They focus on excellence and, more importantly, they do it on purpose and with purpose.
When there are changes, there are recovery periods which are required for the organization to adjust. Unlike athletes, however, organizations are not limited by the physiology of the human body for adjustment. They can improve on it since their adjustment is mostly psychological and learning, not recovery of damaged tissue.
Patience – Our kaizen blitz culture has created an expectation of instant results. But the purpose of the kaizen event is practice – it is a workout so that people can get better at making improvements as part of their daily work. Impatience is a symptom of poor focus and lack of discipline.
Though this list is great, I want to add one more thing:
Accountability. This word, unfortunately, has a negative “blame and punishment” connotation today as in “hold them accountable.” But I don’t mean it in that way at all. When I say “accountability” I mean that people take personal, internal ownership of their own results. It is actually impossible to impose accountability on someone else. Rewards and punishments may influence behavior a little bit (though I think they just improve people’s skills at concealing things), but they have nothing at all to do with accountability.
You can see accountability when things have gone to hell in a handcart. One organization blames external forces beyond their control, and expects someone else to rescue them since “it wasn’t their fault.”
The accountable organization says “Obviously we need to improve more” and embraces their results, even if they were they were caused by events outside their control.
The difference is between an organization that chooses to be in control of its destiny vs. one which relies on luck, and entitlement to survive.
I remembered reading this years ago, and thought I had lost my copy. In the midst of my current file purge, I came across my photocopy of a photocopy of a photocopy that was passed around Boeing with the hand written notation “Hey team, this is a good read – enjoy!”
This started a rather deep email exchange with Michael Ballé that goes far deeper into the book and the thoughts behind it than any review I could ever write.
With Michael’s permission, here is that exchange, with minor editing mostly for readability and flow.
My words are in blue.
Michael Ballé is in black.
Text [in brackets] are my additions to help context.
Michael:
Mark,
Here’s the acid test:
Would you agree that Jenkinson play a different role from Jonah [in “The Goal”] ?
(hint: he is the lean manager :))
Michael
Mark:
Michael –
Actually, no, I don’t think Jenkinson plays a dramatically different role than “Jonah.”
Perhaps if the story had been written from Jenkinson’s viewpoint, with insight into his thoughts and worries about Andy, rather than a third-person view of his actions and words, I would agree. Then it would be about Jenkinson AS a lean manager.
But what we have is Andy Ward’s experience of Jenkinson. Thus, I don’t get any particular insight into what Jenkinson is actually thinking about how to get his message across to Andy except in the moments when he shares his thinking in conversation with Andy.
For example, Jenkinson (and Amy and Bob) are driving the concept of the problem solving culture from the very beginning. But Andy isn’t “getting it” until late in the story.
What was Jenkinson’s internal response to Andy’s misguided approach? What mental PDCA did Jenkinson apply when he saw the right results being gained at the expense of the social structure in the plant?
Thus, this comes across as a story about Andy Ward learning through his interactions with Jenkinson (and Amy and Bob Wood), and his experiences in trying to apply what they were telling him, rather than a story about Jenkinson’s approach to leading and teaching.
So the story is (to me) much more about Andy *becoming* the lean manager than Jenkinson “being one.”
The real difference between Andy Ward’s experience and that of Alex Rogo (his counterpart from The Goal) is that Andy’s boss is participating directly in Andy’s success vs. just issuing an ultimatum. Thus, Jenkinson embraces the role of the teacher as well as the boss.
Yes – that is exactly the message – that “leading” in the TPS is teaching. But I think [The Lean Manager] is much more about Andy learning it than Jenkinson teaching it.
The characters of Amy and Bob Woods seem to be there to add credibility since a CEO really doesn’t have this amount of time to spend with a single plant manager in a large global company. But they are so well aligned with Jenkinson’s approach that they are surrogates for him.
Thus, Jenkinson is the “teacher” in a story about Andy’s insights and development as a leader.
THANKS for asking the question.
It really made me think.
Mark
Michael:
Good debate.
One of the writing issues we’ve had was that Freddy and one of his CEO friends felt Jenkinson was underdeveloped whereas Tom [the editor] and I felt he was already far too omnipresent compared to Andy Ward. The basic challenge for the book was to share the experience of what it feels like to be a plant manager stuck between the hammer (CEO) and the anvil (real life in the plant).
Jenkinson was conceived to be this Batman-like scary character. He is a teacher, but not a very good one. Basically, his one redeeming teaching feature is his patience, but, hey, the guy is a CEO. I’ve worked with several, and then I’ve spent most of my time working with the plant managers so its the latter’s pain I wanted to share. Having said that, all your points are correct, and indeed, Freddy would agree with you.
More seriously, and I hope I can convince you …that [Jenkinson’s character is not a “Jonah”] because it’s a fundamental point I’m trying to get across. As you say, the fact that Jenkinson is Andy’s boss makes it TOTALLY different from the Jonah situation. Obviously I didn’t manage to get this across well enough, but having to learn from someone who holds the sword over your head is a vastly different issue than having found a great teacher (I’d agree with Woods/Jonah), no matter how cantankerous.
This learning-from-boss issue has to be my top of the list reason why lean is spreading so slowly. So I’d argue that beyond literary devices (how many lean novel plots can there be?) this is indeed a core point of the book.
Where I’ve obviously not written this well enough is that Jenkinson IS teaching, but in a boss kind of way, which is a very different position. In particular, I’ve been very mindful (maybe even heavy handed) of the fundamental asymmetry between roles, and the whole issue of how to deal with a boss’ comments.
By the way, Jenkinson is also doing what he can with the people he’s got (can’t replace them all, right?) For instance, you’ll notice that he gets very different responses from each of his plant managers. Jenkinson’s modus operandi is to show a lean problem to the plant manager, draw a line in the sand about where he wants him next, and push him/support him to get there; As people are different, each plant takes a very different path to lean its operations and requires a different mix or arm-twisting and lecturing.
The reason we never get any direct “look” into what Jenkinson really thinks (although we do many other characters) is that I wanted to reproduce this “boss” aura – no one ever actually knows what the boss thinks. We’ve discussed this quite a bit at the time of the writing, and your comments are spot on so I’m really interested in your opinion.
[a follow-on note]
Jenkinson was actually built on what I saw my dad do when he was CEO (I was helping him at the time with expliciting the “System” – I’m a sociologist). So Jenkinson does five [six, actually] things:
1) He forces. At several points in the book, he tells people: that’s the way it’s going to be. In the German plant, in the French plant with the impromptu kaizen, with the strike, etc. Basically, he forces his managers to commit and/or do something right away IN FRONT OF THEIR TROOPS. This is a specific technique – and not an easy one.
2) He gets them to go further in their thinking. At several points, Jenkinson works with Andy to push his questioning further (not always explicitly “why?”, but it does happen. Freddy, who used to be feared because of 1), was surprisingly in the HOURS he spent doing just that. It’s equally terrifying when you’re on the receiving end because, at first, subordinates are fishing for the answer they think the CEO wants to hear, and not thinking – which makes for a lot of frustration both ways.
3) He forces people to work together, particularly when they don’t want to. Actually, Amy does this in Andy’s plant at first with the production plan issue, but Phil forces the Neville/Andy link, and later the Engineering teamwork.
4) Phil encourages “problems first” at several occasions, which is trying to tell his guys that they come to him with problems rather than let them fester, and that if he learns of the problem from someone else first, that’s bad.
5) He lectures – although this is against his own expressed principles – as he states in the car at the beginning of the book. Phil is not so enamored with the sound of his own voice as the author, but we’re still all human, right?
One more thing Jenkinson does on several occasion:
6) “Stay on target, stay on target” – Andy keeps being distracted by all sorts of things, internal politics, problems in his plant, etc. Jenkinson realigns him at almost every conversation 🙂
The two insights we have in Phil’s thinking are:
– when do I pull the plug (close the plant, fire the plant manager/regional manager/sales VP, etc.)
– dealing with the politics of senior management
In writing the [business novel] genre You’re stuck between expliciting the thinking (the lecturettes, love the word), and sharing the experience through an action scene. Then there are the limits of the author’s writing talent – I had to really sweat it before trying work within the plant as opposed to out of it (The Gold Mine), because trying to describe a working plant environment is something of a writing challenge.
Michael
Mark:
Michael –
A couple of questions –
Who is the “ideal reader” – the target audience – for “The Lean Manager?”
What are the explicit teaching points the story is intended to present to the reader? What does this ideal reader take away?
What should the target reader do differently after reading the story?
What aspect of the story gives him that insight?
Did you have those things in mind as you wrote it? Or did the emerge with the story development?
I see Andy as the central character of the story. It is he who undergoes the personal transformation, and the storyline revolves around his interaction with the other characters. As you intended, is a sympathetic character that many people the in the same position will identify with.
Thus the learning from the book is transmitted through Andy, based on his experiences.
I see Jenkinson as a (primary) supporting character, who in combination with the others, shapes Andy’s experience, and through that, shapes the reader’s experience. But in the end, he is mainly a teaching character.
Yes, he is also the boss and needs the results. He leads by example. He teaches “forcing teamwork” by doing it. He makes his intentions crystal clear, does not do hollow posturing, and can play the political resistance against itself. But to Andy, he is sensei.
A good student will be motivated by wanting to please the teacher. In this case, it is also an economic / career imperative, but in the end, it is about a motivated student.
The key points of what to teach certainly come out in the process, including the fact that Andy learns a few things the hard way in spite of being told (like the teamwork thing).
But overall, it seems to be about “How to be taught” by a true lean manager more than it is “how to teach like one.”
If the key point is to teach a senior executive HOW to be a “lean manager” then I guess I’d have written it from the teacher’s perspective rather than the student’s.
If I were a CEO or senior executive, I’d like to know what Jenkinson was thinking when Andy was getting bogged down in distractions. If the target audience for the story is a senior executive or CEO, then I would think the CEO character has to be the sympathetic character, with the frustrations and problems that these guys can relate to. Then they can see he isn’t “Batman” in a comic-book city, but he is dealing with the same problems they are.
John Shook made an attempt at that in “Managing to Learn” but the scenario was too limited to really create any dramatic “ah-ha” moments.
I think Dr. Bahri’s self-experience (Follow the Learner) was a unique perspective of learning-by-doing, but, again, the scenario is too limited for most people to see beyond a medical or dental practice.
So – after re-reading my own note above, and going back to your earlier note regarding your debate about Jenkinson’s character development vs. his “omnipresent” relationship with Andy
– I guess I’d say that:
With Andy as the point-of-view character, then Jenkinson’s development is appropriate.
But if Jenkinson is actually the title character, then I can see where Freddy and his CEO friend felt that he should be more developed. The difference is that, to get that development, the perspective of the story has to shift from Andy to Jenkinson as well. Then the “omnipresence” drops away as an issue because it is about Jenkinson teaching rather than Andy being taught.
One possible follow-on story could be this shift to the teacher’s perspective. Perhaps there is a new acquisition and Jenkinson assigns Andy to mentor the manager there through a turn-around as Andy’s next development assignment. Now Andy is the teacher, (with Amy’s help, or through the A3 process with Jenkinson), and we see the teacher’s perspective as he is trying to keep the student focused on the right things in spite of the noise and chaos that, perhaps, Jenkinson is throwing at it with his demands for performance.
Andy must simultaneously understand “the main problem” in the plant, and get his student to understand it without just telling him the answers. Maybe he sees the guy as a hopeless concrete head, and Jenkinson has to force him to be patient and stick with it.
What does a competent operations manager need to learn to be able to teach someone else? How does he learn it? What is the development process for that?
Then we would have a story of not only how to BE a lean manager, but how to teach one to teach another.
Thoughts?
Mark
Michael:
The books are about 1) teaching and 2) sharing an experience. It all flows from here – I never had a target audience in mind.
The Gold Mine was all about describing TPS from the point of view of a smart guy, who’s got the power to affect changes, but has got to learn all this stuff – that was Jenkinson then. The experience I tried to share then was “The Curse Of Knowledge”.
To Jenkinson most of TPS is new and counterintuitive and every time he’s picked something up, there’s more to it (and I still experience this fifteen years later), because you don’t know what you don’t know.
And for Bob Woods, the impossibility of expressing what you’ve figured out over years to someone, hence the annoyance and grumpiness (not “Jonah” 😉 ). Add Amy, who thinks she’s getting it because the tools make sense to her, but she doesn’t understand the wider business picture nor why older people have trouble thinking that way and you’ve got The Gold Mine. Now, the trick is in
1) sharing an experience and
2) conveying the concepts, so sometimes I get it right sometimes not.
Pat Lancaster of Lantech fame, made the same type of comment [about The Gold Mine] you did: “Why didn’t you write it from the plant manager’s perspective?” To convey the absolute panic of the moment you’re about to pull the plug on the MRP. The comment stuck, and eventually that became The Lean Manager.
The gimmick in [The Lean Manager] is that BOTH Jenkinson and Andy are “the lean manager” – Jenkinson is the closest I can make it to a lean boss outside Toyota (those I’ve known anyway) and Andy is learning that stuff – with the added twist of the asymmetry of relationship that defines authority relationships.
The Gold Mine was about TPS, and this one is about Toyota Way.
My overriding problem as a consultant on the shop floor when I talk to senior execs is: “Are we on the RIGHT problems?” The problem with consultants (me included) is that they seldom understand enough of the business to focus on the right things (not a problem to Toyota consultants with suppliers, because, well, auto is auto).
So I like the idea of Amy consulting with some company and getting them to fix the shop floor and yet having no results on the business because the real problem is in engineering – where she’s got everything to learn (enter Woods & Jenkinson). If I do that, definitely “teaching the stuff” becomes an issue (since this is my specific expertise, I’ve resisted going there so far not to pollute the message too much with my socio-techno stuff)
Will have to let this one simmer for a while.
In any case, the one main point of the entire book is that you can’t do lean to someone else, and you can’t have someone else to it for you – TPS is a line management method, and a problem solving attitude.
I strongly believe that this misunderstanding is at the root of the slow progress of lean – we keep preaching to the choir, but really it’s the hard nosed finance-driven managers we need to interest (more for the next book).
The only way I know how to fight on the field of ideas is by writing books and then getting them into people’s hands. So now that it’s out, I’d like to get it in the hands as as many people as I can to try and change the zeitgeist… Not my favourite activity!
Best,
Michael
I really wanted to share this exchange with you because it highlights a couple of the main problems that are encountered in any attempt to implement real change.
To quote again from Michael’s note:
“In any case, the one main point of the entire book is that you can’t do lean to someone else, and you can’t have someone else to it for you – TPS is a line management method, and a problem solving attitude.
I strongly believe that this misunderstanding is at the root of the slow progress of lean – we keep preaching to the choir, but really it’s the hard nosed finance-driven managers we need to interest.”
And, in the end, there it is.
Ironically, if you are even reading this, you already know it.
The Lean Manager is a success story, driven by the people who are actually responsible to deliver the results. While Michael and I may quibble about whether or not Phil Jenkinson is a “Jonah” character in the sense of The Goal is a discussion about literary structure rather than the core message here. What all of these books have in common is that it is the leaders who drive successful change.
The “slow progress of lean” comes in situations where the implementation is delegated to staff with the charter to “do it to someone else.” And, in my experience (having spent a painful amount of time as that staff), that situation is far more common out there.
I have more to go on this, but I am going to leave it for another day.
John Shook’s latest column on lean.org is titled “Was NUMMI a Success?” He adds some interesting thought to the mix of the ongoing post-mortem on GM and NUMMI.
John argues (successfully, I think) that Toyota’s objectives for NUMMI were to learn how to take their system outside of the safe cocoon of Toyota City in Japan; and that GM’s objectives, aside from getting an idle plant going again, were to learn how to make small cars profitibly, and learn Toyota’s system.
So both companies were in the game to learn.
But Toyota had a huge advantage.
And if there’s one thing Toyota knows how to do it is how to learn, especially where it’s important down at the operational levels of the company – a characteristic that is the embodiment of the learning organization. Toyota’s biggest strength is that it [had] learned how to learn, and it was that approach to learning that defined its approach to NUMMI from day one.
Just as strong as Toyota’s advantage here, was GM’s deficit. While they clearly learned about the system, and indeed implemented pieces of it in new plants, there is no objective evidence that GM ever really “got” that this is much more than an industrial engineering model.
It is a model about continuously challenging your understanding and beliefs.
We start teaching it deep down in the process, “Why did the machine stop?” but the intent is for this thinking to find its way to the very top and learn how to ask “Why are sales 12% under projection this month?”
Toyota has learned some hard lessons about what they did not understand in the last year. I only hope we will be able to say the same about our public gamble on GM’s learning.
Before I get into it, I will break the rules of blogging and acknowledge a time gap here. I did finish the book shortly after I wrote part 2, in fact, I didn’t want to put it down. So now I am going back through and bringing out some key points, intermixed with some other stuff that has caught my interest lately. Anyway – back to what you came for…
Steve Spear has described the TPS as a “socio-technical system.” Put in less formidable terms, it is a system that uses the structure of the work, the work environment and the support systems (the technical part) to create an organizational culture of problem solving.
Jenkinson, Andy’s boss in the book, describes it:
“You need to organize a clear flow of problem solving, explained Jenkinson one more time. “Operators need to have a complete understanding of normal conditions, so that whenever there is a gap, they know it’s a problem. Go and see is not just for the top management, It’s for everybody. This means operators as well, in particular how they learn to see parts and see the equipment they use. How can all operators recognize they have a problem? [emphasis added]
The simple statement, and following question posed by Jenkinson sums up a great deal that is left out of lean implementations. I see it everywhere, and will be commenting on it more shortly.
We talk about “go and see” (or “genchi genbutsu“) as something leaders do. I think this is because traditional leaders aren’t naturally out in the work areas, on the shop floor, in the hangars, etc. We don’t think about the workers because they are there all of the time.
Yes, they are. But what do they see? Do they see disruptions and issues as things they are expected to somehow work around and deal with? Or do they see these things as something to call out, and fully participate in solving?
And if they do see a problem, what is the process for engaging it?
Just saying “you are empowered to fix the problem” does not make it so. When are they supposed to do it? Do they have the skills they need? How do you know? Is there a time-based process to escalate to another level if they get stuck? (Or do they just have to give up?)
And indeed, as the story in the book develops, Andy turns out to be taking a brute-force approach. He is directing staff to implement the tools and to solve problems. But in spite of nearly continuous admonitions from his boss and other experts, he is not checking how they are doing it. He has put a “get-r-done” operations manager into place, and while the guy is getting “results,” in the long haul it doesn’t work very well. Yes, they end making some improvements, but at the expense of alienating the work force.
It is only late in the story (and I won’t get into the details to avoid playing the spoiler to a pretty good plot twist) that Andy finally learns the importance of having a process that is deliberately designed to engage people.
Commentary – it is amazing to me just how much we (in the “lean community”) talk about engaging people, but never really work through the deliberate processes to do it. There are explicit processes for everything involving production, administration, etc. but somehow we expect “engaging people” to happen spontaneously just because we believe it is a good thing.
The message in this book is loud and clear. This is about leadership. The tools are important, yes, but only (in my opinion) because they are proven techniques that allow people to become engaged with the process.
But the tools alone do not require people to get engaged.
Permission to make input is necessary, but not sufficient. If you want people to be engaged, you have to deliberately engage them. Otherwise you are just asking them to become nameless cogs in “the system.”
In my review of Kaizen Express back in May, I took LEI to task for two things – First, I didn’t feel Kaizen Express contributed anything really new to the body of knowledge. I would have been satisfied if it had more clearly explained what had been said before, but it didn’t do that either. Second, and more importantly, I felt that Kaizen Express, and the LEI in general, were propagating the conception that the tools were what defined “lean” and that “the tools” were “the basics.” I disagreed on both points, and still do.
I am now about halfway through The Lean Manager, and I believe this book is addressing those issues – and hopefully challenging some of the thinking within the publishers. In other words, in its content, this book is everything that Kaizen Express isn’t. Get it. Read it. Do what it says, and you will actually be implementing the basics.
What makes this different? Instead of revolving around technical descriptions of the tools, this book clearly shows the proper relationship between the tools and the two most important aspects of what makes the Toyota Production System work:
Leaders (and how they lead and what they lead – and it isn’t implementing the tools)
People (yes, other books pay lip service by mentioning shop floor engagement, but The Lean Manager is all about shop floor engagement)
The authors start to hammer home the point in Chapter 2, Everybody, Every Day. In one of the many lecturettes they use to convey the key points via their characters, Amy, a corporate consultant, sums it up:
“Everybody, everyday solving problems, that’s the only answer to the Pareto dilemma. You’ve got to visualize two flows in the plant. One: the product flow[. . .]. Two: the problem flow to the person who finally solves the problem. [. . .] you shouldn’t funnel all problems to your key technical people. You should protect them to work on the really difficult issues. What you have to organize is the problem solving in the line!”
And with that, the rest of the story follows – this fictitious plant manager under fire in this fictitious company sets out to do that.
The subsequent chapters (so far – remember, I haven’t finished the book yet) are Go and See, which hammers home the importance of the leaders – all of the leaders being present, not just to witness problems, but to ensure they are being solved by the right people, in the right way. Further, they must break down any barriers which impede that flow. And it’s not just the leaders. Ultimately, the entire shop floor is organized so that everyone is immersed in genchi genbutsu every time a task is carried out or work is performed. This becomes the check in PDCA.
Chapter 3 is titled Managing is Improving and begins the confront the psychological and organizational aspects of the changes that are now coming to a head in the story. This part requires the most creativity on the part of the authors, as it is an entirely human process. Because it is a human process, not a technical one, it is impossible to write a technical manual on how to do it. It requires knowledgeable, dedicated leadership that is humble enough to stake out a position that might be wrong, knowing that doing so improves the chance of learning something.
And that has been the issue in our industry. It is far, far easier to describe the tools in excruciating detail than it is to confront the leadership and organizational change issues. And because the technical descriptions predominate the literature (including, and especially what has come out of LEI for the last 10+ years), it is far easier to believe that “implementing the tools” is something that leaders can delegate to specialized technical staff.
This book, so far, is (rightly) turning that thinking on its ear.
I just started reading this book, and my initial feeling is that it is a winner. Rather than producing a batch review of the whole thing at the end, I thought I would employ “one chapter flow” and share my impressions with you as they are formed. As I write this, I honestly do not know where it is ultimately going.
I am excited about this book because it is challenging the decades-old paradigm of kaizen events run by specialists (while simultaneously trying to justify the change activity to the people who hired them in the first place). In its place is a leader who knows what he is doing, and appears to be starting to lead by asking tough questions.
Even with that initial endorsement, this book appears to be following the standard formula established by Eli Goldratt in The Goal.
Manager finds out factory is being closed. News is devastating to his personal life.
The Jonah character emerges and teaches him how to save the operation.
He applies what he learns and saves the day.
While there is nothing wrong with this structure, it is wearing a bit thin, at least to me. So I hope that the authors are going to find an interesting twist that surprises me. Still, because this is a novel with a point, vs. an attempt at classic literature, I’m not going to spend much time on the literary style.
The two main characters (so far) are Andrew Ward, the manager who finds out his plant is being closed, and Phil Jenkinson, the new CEO, with the double role of bringing the bad news (closing the plant) as well as filling the role of the Jonah (or sensei in this case, I suppose).
In the opening chapter, Jenkinson’s style is authoritative, bordering on confrontational. Without knowing the culture of this fictitious company, I can’t say whether his blunt, direct approach is from necessity or because he simply doesn’t have the skills to ask tough questions without pushing people back. I’ll hold judgment on that part. My hope is that the book doesn’t teach this approach as how it has to be done, because in my experience, it doesn’t have to work that way.
The message, though, is crystal clear. The old way isn’t cutting it. Leaders, not staff, are responsible for results (safety, quality, delivery, cost). Leaders are expected to know the hot spots in their operations. Leaders are expected to be involved in the details – not to micro manage, but to develop the capabilities of others. (That last one is a bit of an extrapolation on my part.) “Lean” is not a program, not projects run by a staff of specialists, it is how we will manage the company.
The notable quote from this chapter comes in a shop floor lecture given by Jenkensin and nicely sums up the relationship between process and results.
“Results… are the outcome of a process. What we want are good results from a controlled process because they will be repeatable. Bad results from an uncontrolled process simply mean that we’re not doing our job. Good results from an uncontrolled process…only mean we’re lucky. Today, bad results from a controlled process just says that we’re stupid: We expect different results from doing the same thing over again.”
Based on that, I sketched out this little matrix that captured my response and the key points.
But the technical nuances aside, this story is clearly developing into one about leadership. The key issues, so far, are:
Safety, quality, delivery, cost, are line leaders’ responsiblity, with assistance from technical staff – who are also experts.
Though it is certainly a culture shock, the leader is teaching by asking questions.
The various character’s reaction to the confrontive authoritative style is predictable. I am uneasy, at this point, with that approach being held up as an example of the best way to get this done. But it is only Chapter 1.
I am really encouraged when I see a mainstream business publication like Forbes.com begin to discuss how better flow can cause problems for traditional cost accounting. I would refer this little piece to any executive, at least as a starting point for a discussion.
Key points:
Unless the accountants understand the way that lean works, in the worst case it seems to them that lean produces losses, not efficiencies. In a typical case, they cannot see the cost advantages.
This is especially a problem if there is a lot of excess inventory in the system. Holding everything else constant, reducing inventory causes two problems. First, it cuts the “assets” side of the balance sheet, and can look like a write-down, when in reality, inventory is simply being converted to cash. (and in today’s economy, cash is a good thing to have). Another effect is that it looks like costs go up because there is less inventory to “absorb the costs.” That is more a problem with the absorption model itself which can report a “profit” even though nothing was sold.
I really liked this analogy:
One presenter at the summit used weight loss as an analogy. When dieting, standard cost accounting would advise you to weigh yourself once a week to see if you’re losing weight. Lean accounting would measure your calorie intake and your exercise and then attempt to adjust them until you achieve the desired outcome.
That is the heart of the whole thing. The Toyota Production System is real time. It is designed to detect and respond to problems immediately. Managing it requires clear undistorted information, not abstract models that include things that aren’t affected by the “right now” decisions. Absorbed overhead costs are not part of the manufacturing function, and often overwhelm the true costs of manufacturing.
The countermeasure?
Value stream accounting was suggested by Bruce Baggaley of BMA as a way out. The company’s revenues and costs are reported weekly for each of the value streams. The costs reported do not include allocations or standard costs, just the costs that actually occurred within the value stream last week.
How to fit this in to your kaizen plan:
Now you are looking only at the actual costs incurred by the shop floor operation. You should be able to look at your kaizen activity, predict the results you will achieve, and then use this weekly report as a CHECK in your PDCA cycle.
“What numbers should we see (as a result of this improvement)?”
“What numbers did we actually see?”
“Is there a difference?”
“Why? What didn’t we understand about our process, our improvement, or our costs?”
No matter what the President wishes about maintaining “hands off” management, that isn’t going to happen once the corporate constituents realize they can use all of their lobbying tools to influence corporate decisions. I hope I’m wrong about all of that.
I still hope I am wrong. But I think this is going to look more like the military attempting to close bases (and being blocked by Congress) than it is a desperate auto company trying to to regain its footing.
Once government comes into the picture, government control, and then government politics follow. This can’t be good for GM, the USA, or the auto industry in general. As long as the .gov owns controlling interest in a hobby auto company, this is only going to get worse.
Now – is the UAW going to figure out that what remains of their pension and retiree medical funds (which are largely in GM stock) are being put at risk by the government majority owners forcing an unsustainable cost structure onto the company?
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