Tag: Leadership

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Leadership: Deal With The True Constraint

I am starting to read a review copy (courtesy of McGraw-Hill) of Jeff Liker and Gary Convis’ new book, The Toyota Way to Lean Leadership. (The hot link goes to my Amazon page.)

In the spirit of one-piece-flow, I am to share key thoughts as I go rather than save everything for a thousand word review at the end.

One of the first points that comes out – in the prologue no less – is the acknowledgement that people development is a constraint to growth that you ignore at your peril.

One of the results of Toyota’s breakneck pace of growth in the first half of the last decade was that they were still making North American decisions in Japan.

They were doing this because, in the authors’ words, “…Toyota did not develop enough leaders, or did not develop leaders that it trusted sufficiently, in the North American operation to allow decisions making and problem solving to be as close to the gemba as they should have been.”

But rather than say “we grew too fast,” the President, Akio Toyoda sees the limits and the relationship:

“The problem was that the pace of growth was faster than the pace of human resource development… It is not the growth pace itself, but it is the relationship between the pace of grown and the pace of [people development].”

When traditionally trained managers think about constraints to growth, they typically think about things they can buy. “People” as a constraint comes in only as a hiring problem.

But it takes time to develop “people” into a team that thinks and moves in unison. Today’s leaders, up to this point Toyota included, underestimate both the time and the effort it takes to do that.

Any good sports team knows what it takes to build a team. So does the military. We understand the science, the psychology. But perhaps because it is difficult and sometimes messy to deal with people (and it is certainly impossible to reduce the effect of good teamwork to a stoplight report and a spreadsheet), “people development” gets delegated to HR, or people are sent to classroom training and given “certifications.” Doesn’t work, never has.

Akio Toyoda was acknowledging an uncomfortable truth – that they had fallen behind on people development and they had continued anyway, without pulling the metaphorical andon and addressing the issue as soon as it came up.

This simple insight hits at the very core of what we, as a community, need to address, and what the flag-bearing institutions in our community still need to fully embrace.

“Continuous Improvement” means “continuously improving people.”

While just about every “lean overview” I have ever seen uses some form of lip service to the concept of “people based system” everything then goes straight into describing the technical characteristics of everything but how people are developed.

What I like is that in the last couple of years the mainstream books are starting to address this topic in a meaningful way. This, of course, isn’t the first of Jeff Liker’s books to hit here. And Toyota Kata is really the first to address the mechanics of people development as thoroughly as we have addressed the mechanics of kanban.

I am liking what I am reading in this book so far, and I’ll be working to correlate what I read with other works out there plus my own experiences. This should also tie in nicely with points I want to continue to make on Bill Constintino’s presentation.

Stay tuned.

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Support vs. Involvement

I spent last week teaching three sessions of Job Instruction. One session at the end of night shift starting at 5am, the second session catching the start of day shift at 7am, then the third session for swing shift at 1:30.

What is cool, though, is there is a senior member of the site leadership team in every session. They are not just observing, they are active participants.

Next week those leaders, with input from the team members in the class, are going to caucus and discuss the ramifications and how to deploy this method across their operations.

This is critically important because just teaching a few dozen people a skill and expecting them to each apply it independently doesn’t work. The company has to also develop the ecosystem that it can flourish in.

But this has been the pattern from this company from the beginning.

The Operations Manager has been leading the operations kaizen teams, working hard along side the team members to develop disciplined, effective pull systems. This is a high-variety product mix, with lots of different routings, so there were some real challenges to overcome. I was really impressed with their application of what would normally be very advanced thinking.

Results? Over the last six months, their metrics have taken a clear turn upward. You can see the inflection point on the graphs. Their company sister operation is starting to take notice. Good things all around.

A plant manager once shared a conversation he had with his CEO. The teaching is important, but what makes it work is willingness to be taught.

When we talk about management involvement, this is the crux. This team has been curious, willing to try and explore things – in front of their team members – and willing to keep at it until they figure out how to make it work.

That’s what it takes.

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Mike Rother: Time to Retire the Wedge

Note – this post was written pretty much simultaneously with a post on the lean.org forum.

Mike Rother has put up a compelling presentation that highlights a long-standing misunderstanding about the purpose of “standards.”

Some time ago, a (well-meaning) author or consultant constructed a graphic that shows the PDCA wheel rolling up the incline of improvement. There is a wedge labeled “Standards” shoved as a chock block under the wheel to keep it from rolling back. That graphic has been copied many times over the years, and shows up in nearly every presentation about PDCA or standard work.

The implication – at least as interpreted by most – is that a process is changed for the better, a new standard is created, and people are expected to follow the standard to “hold the gains” while they work on rolling the PDCA wheel up to the next level on the ramp.

Slide 6 (taken from the book Toyota Kata) shows the underlying assumptions that are implied by this approach, especially when it doesn’t work.

There are some interesting assumptions embedded in the “wedge thinking.”

The first one is that “the standard can be ‘held’ by the people doing the work.

That, in turn, means that if when things start to deteriorate, the workers and first line leaders are somehow responsible for the “slippage” or “not supporting the changes.”

With this attitude, we hear things like “Our workers aren’t disciplined enough” or “How do I make them follow the standard?” The logical countermeasures are those associated with compliance – audits focused on compliance, and sometimes even escalating punitive actions.

Back in my early days, I had a shop floor team member call us on it quite well: “How can you expect us to hold some kind of standard work if the parts don’t fit?” (or aren’t here, or the tools don’t work, or jigs are misaligned, or the machine isn’t running right, or someone is absent, or we are being told to hurry and just get stuff out the door?)

This is the approach of control. The standard is fixed until we decide to change it.

Taiichi Ohno didn’t teach it this way.

Neither did Deming or Juran. Neither did Goldratt. Nor does Six Sigma, TQM, TPM.

Indeed, if we want creativity to be focused on improvements, we have to look up the incline, not back.

We are putting “standards” on the wrong side of the wheel. Rother’s presentation gets it right – the “standards” are the target – what we are striving to achieve.

The purpose of standards is to compare what we actually do against what we wanted to do so we know when they are different and so we have some idea what stopped us from getting there.

Then we have to swarm the problem, and remove the barrier. Try it again, and learn what stops us the next time.

The old model shows “standards” as a countermeasure to prevent backsliding, when in reality, standards are a test to see if our true countermeasures are working.

I believe this model of “standards” as something for compliance is a cancer that is holding us back in our quest to establish a new level of understanding around what “continuous improvement” really means.

It is time to actively refute the model.

If you own your corporate training materials, find that slide (it is in there somewhere) and change it.

If you see this model in a presentation, challenge it. Ask what should happen if something gets in the way of meeting this “standard.”

“What, exactly do you expect the team member to do?”  That sparks an interesting conversation which reveals quite a bit.

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“Find the Bright Spots”

One of the problems facing all of us – from pundits to practitioners alike – is “too much information.” We look at a complex state, like the way Toyota operates, try do describe it in great detail, break it down, build models, and say “OK, make it look like that.”

So one of the most common questions is “Where do I start?”

The platitude is “start with 5S” but in reality, that doesn’t really work very well either. It doesn’t really drive a cultural and behavioral shift. If you have to audit people into compliance, that’s how it is working for you.

What we know today is that TPS is much less about how it looks than it is about what people do.

I have seen a handful of other companies who have managed to get a true continuous improvement culture running (at least for a while). There is something very different about them vs. a standard “lean implementation.”

Yet these companies have the same caliber of people, the same resources, the same baseline problems as everyone else. They operate in the same environment, and yet operate differently.

A key point in Switch is “find the bright spots.” That is – look at who has success in the same environment, and grasp what few factors are actually making a difference.

Perhaps, rather than “looking for waste” we ought to be looking at what few things make a big difference. Just a thought.

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Why Don’t They See This Is Better?

“Resistance to change” is a common theme of discussion among practitioners on various online forums, as well as in emails I get from readers.

One thing I see fairly often is that a practitioner will be suggesting a visual control or a specific application of a “lean tool” as a “better way” in the process being examined.

“They can just look it up on the computer,” say those holding on to the status quo, “why do we need to put up a board?”

Why indeed?

So the practitioner tries to make a logical case, and often comes away frustrated. “Leaders aren’t supporting the changes” is a common lament at this point.

But let’s break down the problem and see if there is more we can do.

We are often debating whether or not a particular solution is better than the current way.

But in our “implement the tools” approach, we tend to make “lack of a specific solution” into a problem.

Whoa. Let’s back up a bit and see if we can head this off.

Do you have agreement on a clear target objective, one that all parties can describe? Do you know how the process should be performing?

Note I said “should” not “could.”

“Could” is potential.

“Should” is an unmet expectation. Big psychological difference there.

If everyone agrees that the status quo isn’t getting it done, and also agrees on what they want to achieve instead, then the next question is “OK, what is stopping us from taking the next step?”

This shouldn’t be an abstract exercise. As you watch the people in the process try to reach a higher performance level, look for “What just got in our way?”

You need to help the leaders, and your other constituents see it with their own eyes. Don’t expect them to take your word for it. You wouldn’t take theirs without your own observation.

If everyone can see, for example, that a team member gets too far behind to recover before anyone else notices, or that a machine is experiencing stoppages or excessive changeovers, for example, then you can start discussing solutions.

Perhaps the team leader needs to make quick status checks periodically, in a way that is not intrusive.

What is stopping him?

Well, that’s difficult right now, because everything is buried in the computer, and often updated in batches after the work is done.

Hmmm.. What could we do to make things more visible, in real time? Is there a way we can set up the work area so the team leader (and the worker, and anyone else just happening by) could readily see there is an issue here?

Now, and not before, is the time to start discussing solutions. But you can’t just make the logical argument. You have to get agreement each step of the way.

That might very well take longer than you want it to. People are funny that way.

But the bottom line is this: “Lack of your pet solution,” no matter how many books and name-brand authors refer to it, “is not a problem.”

We create a lot of our own resistance by running into things, and leaving fires behind us.

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Measuring Improvement

One of the most common (and frustrating) problems for the staff lean practitioner is being asked to “measure the savings” resulting from specific improvements.

(This problem is related to, but different from, trying to measure “lean progress” or the status of implementation.)

There are two issues in play here.

First is the level of understanding in the leaders who ask for this in the first place. Frankly, it isn’t their fault. Authors, consultants, and practitioners have been “selling” the concept of “lean production” as a stand-alone thing to do for decades.

It is really easy, in the initial excitement of grasping the potential, to just try to push the tools and promise that great savings will result from simply implementing them.

The initial literature was all about describing the performance of benchmark companies (like Toyota, though there were others), describing the visible tools and saying, in effect, “if you just implement these tools, you’ll get this kind of results.

But making these changes can be expensive. The obvious costs are consulting fees, time (perceived to be) taken away from production work. Therefore, there must be a sufficient ROI to “justify” making the changes.

For the practitioner, the countermeasure is to try to shift the focus to establishing a business objective first.

This shifts the conversation from “justifying improvement” to “what problems must we solve to hit the objective?”

The financial evaluation then shifts from "justifying moving beyond the status-quo” to evaluating alternative solutions to the problem.

If you ask directly, most managers will have things in mind that they would like to do better. The challenge is to get those things framed in enough detail that some value is created for actually getting there.

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Toyota Under Fire

Toyota Under FireSo many of us were wringing our hands a year ago. Our idealized vision of Toyota as the source of all perfection and example was tarnished and crumbling before our eyes. Prominent “names” in our field were talking about the need to go beyond Toyota. The vaunted TPS was clearly failing.

Or was it?

Like everyone else, I could only speculate based on a mix of the (mis) information emerging from regular press reports, the opinions of some insiders, and the insights I could glean from contacts with direct access into the company.

When McGraw-Hill offered an early copy of the book for review, I eagerly accepted because I, too, wanted to know the whole story. (<— smooth, seamless disclosure for the benefit of the FTC)

What really happened?

That is the question that Jeff Liker (with Timothy Ogden) set out to answer in the book Toyota Under Fire.

Losing Money

When I hear the term “Toyota under fire” I think of the “sudden uncontrolled acceleration” debacle from late 2009 through the spring and summer of 2010.

Perhaps that is because I didn’t consider that reporting three quarters of losses was the kind of adversity I would consider “under fire.” At least not for Toyota.

In retrospect, I probably glossed over that period because I felt I could predict Toyota’s response to the great recession and the economic problems it caused them – they would double down on what they have always done, and strive to do it even better than they had in the past.

They would first work to get the problem contained – and return to profitability without compromising their core values.

Then they would work to eliminate the root cause(s) of the problem by reducing their break even point.

The result would be the emergence of an even more formidable competitor that is capable of weathering an identical recession without incurring these losses.

And, according to Liker and Ogden, that is exactly what happened.

In the first half of the book, they tell the story of how Toyota responded to the recession in a rich detail that captures how this amazing corporate culture functions when it is under financial pressure it has not experienced since 1950.

What we see is the entire company mobilizing and carrying out its kata pretty much as described by Mike Rother in his book.

But there is also more. We see that this was only possible because the company had worked hard in the good times to be prepared for this kind of adversity, even as it was unthinkable. This enabled Toyota to do things that only Toyota could do.

No matter what other companies may say about their values around team members and suppliers, there are few that could (or would) continue to make payroll, support key suppliers, and continue to invest in R&D while reporting losses and facing a 30% drop in their top line, even if they wanted to.

And we see another side of the story – how an incredibly ignorant, uninformed and uncurious press force-fit the things they saw into their own management paradigms – turning a show of strength in the face of adversity into a negative story. It turns out this is a precursor for what was to follow.

Losing Faith

In August 2009, just as the financial crisis was coming under control, a tragedy set a series of events into motion that would test the company to its very core.

…Mark Saylor and his wife, daughter and brother-in-law were killed when their Lexus, on loan from a dealer who was servicing the family’s own vehicle, careened out of control at more than 100 mph, collided with another vehicle, and crashed into a ravine, setting the car ablaze.

Liker and Ogden offer a comprehensive account of the events that unfolded over the next year while this story spun out of control as the press, politicians, attorneys all fed on – and added to – the public’s fears about the safety of their automobiles.

The story is both fascinating and frustrating as Toyota’s technically oriented culture is focused on facts and data while it is confounded and overwhelmed by a political and litigation culture that focuses on sensationalizing rumors and innuendo.

Toyota learns a hard lesson – that reputation has less to do with the truth than about perception, and decades of work can be destroyed in weeks in the political-legal-press feeding frenzy.

In the end, though, the Toyota Way emerges. Just as they did in the recession, they accept responsibility for the things that affect them, regain focus on their customer’s needs – technical as well as emotional – and double down on what Toyota does best. This time, though, they learn to do that in a different context – the global / cultural one.

A great story in the classic mold of the protagonist emerging stronger from adversity while confronting his personal shortcomings.

Overall

I strongly recommend this book for anyone who wants to be able to articulate the story of how Toyota persevered through the most trying time in their history since they emerged as a global company. This was a transformative time for the company, possibly as significant as the losses and strike in the late 1940’s that set the path for the future.

That being said, there are two areas where I think Toyota Under Fire could have done better conveying this story.

The first is context. And context begins with background.

In the decades prior to all of this unfolding, Toyota had done little (in my opinion) to alter the public’s view of them as a “foreign” company even though they directly employed tens of thousands of people in the U.S. and sourced many millions of dollars of parts from U.S. companies. I believe they failed to put a human face on the American side of the company. They allowed the product to speak for them. In effect, they allowed their competitors to control a large part of Toyota’s cultural positioning.

Hal-9000Next is the aspect of technology. Liker and Ogden address the gap between engineering reliability of the electronic controls and the public’s emotional confidence in them.

However I am not sure they convey the cultural gap between that emotional confidence (or lack of it) in the USA vs. what would be felt in Japan or even Europe. Simply put, Americans are less trusting of technology in their cars. I am not certain the engineers in Japan fully grasped this gap. If they did, I am not certain they didn’t dismiss it.

With all of that as background, while the Saylor’s accident would have been tragic at any time, late August 2009 could not have been a worse moment for Toyota.

The accident was a scant two months after General Motors’ controlled immolation into government-owned bankruptcy, and the company was still breaking up. Chrysler was sold off to Fiat. Ford’s stock was selling for under $5.

And the day before the Saylor accident, Toyota had announced that the NUMMI joint venture was being closed after GM had pulled out.

With Toyota relatively healthy (compared to everyone else), still perceived as a “foreign” company, and seen by many as “responsible” for the demise of GM, they were operating in a public and political atmosphere that was fuel and oxygen rich. The Saylor accident was a spark.

Had Toyota grasped how precarious their political and cultural standing was, they might have acted much more aggressively and much sooner when this story started to unfold.

The fall of 2009 and spring of 2010 was slow for domestic U.S. news, so there was nothing to push the Toyota story out of the news cycle.

While Liker and Ogden correctly and accurately relate how Toyota managed to finally “get ahead of the story,” the precipitous drop in negative press reports about Toyota occurs in August 2010 – as the drama of the trapped miners in Chile begins to unfold.

I mention this context because it is not only important for the reader, but equally important for Toyota. They learned a hard lesson about the U.S. news cycle, especially how a story can get legs under it. This had to be tough for a company used to dealing in a world of verifiable facts and data.

To a company who values, above all, being in control of their own destiny, they had allowed much of the background to be written by others.

This story was as much about Toyota’s total lack of an emotional connection into the overall U.S. culture as it was about their cars and engineering. And while Liker and Ogden talk extensively about Toyota’s aggressive countermeasures to establish better connections to customer’s perceptions, I would like to have read about how Toyota addressed (or didn’t) this cultural positioning as well.

The only other quibble I have is I believe the book could have been a little more tightly edited. I am giving this a pass, though, because the final technical report from NASA came out in March 2011, and this book landed on my porch a scant couple of weeks later – the ink was still wet. So from that standpoint, I recognize the last minute frenzy of writing and editing that had to be done to include the latest relevant information.

In the end – buy the book but recognize it is still a bit insular – much as Toyota can be. That is perhaps something they still need to address.

Breaking News

Two stories of interest as I am writing this.

Toyota Wins Key Unintended Acceleration Case

(April 1) After deliberating for approximately 45 minutes, a jury reached a defense verdict in favor of Toyota Motor Sales, U.S.A., Inc. in an alleged unintended acceleration case brought by Dr. Amir Sitafalwalla, who claimed that an unsecured driver’s side floor mat was the primary cause of the crash of his Scion vehicle in August 2005.

During the course of the week-long trial, Dr. Sitafalwalla’s primary expert, Dr. Anthony Storace, withdrew his assertion that the Electronic Throttle Control System in the Scion could also have been a cause of the accident based on his acknowledgment that he had no basis to support that claim.

Of note is that the news reporting of this story is buried.

This story, however, was on the news tonight (April 4):

Toyota: N. American plant closures likely in April

By BRUCE SCHREINER, Associated Press – Mon Apr 4, 4:56 pm ET

LOUISVILLE, Ky. – Toyota Motor Corp. said Monday that it’s inevitable that the company will be forced to temporarily shut down all of its North American factories because of parts shortages due to the earthquake that hit Japan.

The temporary shutdowns are likely to take place later this month, affecting 25,000 workers, but no layoffs are expected, spokesman Mike Goss said. Just how long the shutdowns last or whether all 13 of Toyota’s factories will be affected at the same is unknown and depends on when parts production can restart in Japan, he said.

So far the North American plants have been using parts in their inventory or relying on those that were shipped before the earthquake, Goss noted. But those supplies are running low.

“We’re going to get to a point this month where that gap in the pipeline starts to show up. So we’ll have to suspend production for a while,” he said.

While interesting, this story buries the lead into the middle of the second paragraph: “… affecting 25,000 workers, but no layoffs are expected.”

This statement is ambiguous, but if it means “we are going to keep paying everyone and working on improving the work while the plant is shut down” that is the story here. Otherwise, this sounds like a routine shutdown-and-furlough-the-workers story.

What makes it more interesting is that Toyota’s press release site refutes the story altogether:

Toyota Statement Regarding Status of North American Production

NEW YORK, NY (April 4, 2011; Posted at 3:15 PM EDT) Contrary to recent headlines, nothing has changed from our update from March 23rd regarding our North American operations.

We continue to assess our supply base in Japan following the earthquake/tsunami. We have communicated to team members, associates and dealers here that some production interruptions in North America are likely. It’s too early to predict location or duration.

Currently, the greatest majority of parts for our North America-built vehicles come from approximately 500 suppliers in North America. Also, we continue to receive parts from Japan that were already in the pipeline, limiting the immediate impact. We will continue to work closely with suppliers in North America and Japan to minimize any disruptions to Toyota’s overall North American operations.

The reason I bring up this little chain of news stories is that it reinforces my notion that Toyota is still playing “business as usual” in how they manage the news cycle. In this case, no harm, but my questions for them are:

  • What is your target condition for public perception of these stories?
  • What is the current public perception?
  • If there is a gap, what is keeping it from being closed?
  • What is your plan to address that issue?
  • When can we see what you have learned from the first step?
because every process is subject to kaizen.
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Why before What

In this TED video, Simon Sinek summarizes a key thing that differentiates an idea that catches on vs. one that plops.

This is relevant to us at a couple of levels.

First, as Sinek points out, truly great companies succeed because they stand for something higher. They have a “why” that drives what they do and how they do it.

Companies that cannot articulate what they stand for are at a competitive disadvantage vs. those who can.

But these concepts are also critical to those of us who are trying to sell the concept of changing the way our own organizations run. Watch the video – then continue below.

In spite of what is taught in the business schools, business decisions are rarely made based on financial analysis and rates of return. Those things are carefully constructed, but often after the fact to justify what someone wants to do already (i.e. has already decided to do).

When we try to sell our changes, we often try to address the “what’s in it for me?” but still continue to try to make logical “what” type arguments.

That doesn’t work. It has to feel right.

Think about your own organization. When or where do things feel like they are going really well, what is aligning? What values are being realized? How do those moments differ from times or places where things are not going so well?

What makes people say “OH Yeah!” ?

As you try to make the case for “lean” or continuous improvement in your organization, are you crystal clear what you believe in? Can you articulate it? Do others in the company want to believe in the same things?

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Lean Facilitators are Countermeasures

What is the role of your lean facilitator?

This question comes up now and again, was recently posed on the LEI forums by someone looking for help with a job description.

I extrapolated from his question that he was looking to the job description as a line of defense against dilution of the facilitator’s focus and effort by projects that might not be going in the appropriate direction.

In effect, this is putting the lean facilitator in the role of a weakened zampolit with the role of educating the “correct view” and challenging decisions that run counter to it. Except that more often he has to sell the “correct view” rather than impose it.

The fact that the question is being asked at all indicates that the organization has not really thought through what their operational vision is. How will the company work, what are the responsibilities and roles of the leaders?

What are the leaders’ job descriptions in this new world?

Those job descriptions become a target condition for each of them.

What is the gap?

If there are gaps in skills and knowledge, then we need countermeasures.

At this point, the role and responsibility of a lean facilitator might begin to emerge as one of those countermeasures. Don’t have the expertise? Import it.

What doesn’t work, though, is to use the lean facilitator to substitute for the leader’s full and direct participation in the process of improvement. And no job description, no matter how carefully crafted, can fix that.

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The Benefits of Continuous Improvement

There are a lot of variations on a theme where someone asks an Internet forum how to quantify or justify the benefits of implementing a continuous improvement program.

If you think about it, though, this is really interesting question.

What are the benefits of NOT having continuous improvement? Why would managers deliberately decide not to have a learning organization, not to have continuous improvement, not to fully engage the intelligence of their workers?

Why would managers deliberately decide not to improve safety, quality, delivery, lead times?

What if we asked the question that way?

What is the benefit of not having these things?

If that question is subsequently dismissed as stupid (which I hope it would be), then the question is no longer whether they should be pursued, but how.