We Don't Make Cars: Applying Lean to Other Industries

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People don't go to Toyota to work, they go there to think" – Taiichi Ohno

Although much of what we now call lean has been practiced by Toyota and its suppliers for decades, most of the world began to learn about it in the 1990s with books like The Machine that Changed the World and Lean Thinking. It has been more than 25 years since then and, although companies in a variety of industries are well into their lean journeys and showing positive results, there are still many people who have trouble thinking beyond lean as a strategy for high-volume or automotive manufacturing.

As someone who has worked in a variety of industries, I have encountered difficulties applying lean thinking in certain situations, but it was due more to cultural reasons than industry differences. Regardless of the industry, if the organization has an aim and uses processes to achieve that aim – and they all do – lean thinking applies. Lean is about continually thinking, learning, and getting better about what you do; not about producing cars. If your processes are not perfect, you don't already know everything there is to know about your business, or change regularly occurs in your organization or industry, then lean can help.

During my early days in oil and gas, I got a lot of pushback about the suitability of lean to the industry. When I heard the "we don't make cars" argument, my response was usually if Toyota produced oil & gas and we made cars, we would say lean applies only to oil and gas. The same goes for any industry.

It's Always Easier Somewhere Else

It is common to talk to people in various industries who believe that lean applies easily to other industries but is much more difficult in their own. Even within an industry, I've met people who believe their own circumstances are so unique that, even though other organizations or areas may apply lean thinking fairly successfully, it does not fit their own situation.

Getting people past the notion that lean will not work in an organization or industry requires continual coaching, demonstration, and a lot of patience. It also requires educating people about the basis for lean and how it drives learning and improvement. The key is to get people to understand lean beyond the tools so they will start to see where they have gaps in performance, knowledge, and learning. A tools-focus in lean, something that is far too common, leads people to google things like 5S, value stream mapping, or SMED, and only find examples of application to Toyota or other high-volume manufacturing situations. Seeing examples like this tends to cement the idea that the practice is unsuited to their own situation.

The Lean System

Lean is about thinking and learning, and if a business is experiencing problems of any kind, there is room to learn. The basic steps to drive lean are shown below. The key to success is to use the steps to learn by doing, which requires clarity on the expected result of each decision, action, and process, and using the actual results to see where things did or did not provide results as expected.

Lean is a system comprised of several elements that work together to drive learning and improvement and, like any system, if you leave out one or more components, it won't work.

1. PURPOSE: Every organization must understand its purpose to have any chance of sustaining success. The purpose, consisting of why the company exists (the mission) and where it is headed (the vision) must drive everything it does. The key is to make it clear, a stretch (difficult, but not impossible), inspiring, and focused on providing value.

2. BUSINESS NEEDS: Visions tend to describe the future in general terms like industry-leading, most respected, improve society, etc. This is okay because what is considered industry-leading today is not necessarily what it will mean 5-10 years from now and you don't want a specific target to mislead the organization. This element of lean thinking includes the 3-5 year objectives that make the vision much more concrete. Although many industrial companies often identify the gaps in terms of safety, quality, delivery, cost, and people development (SQDCP), it is important to tailor the objectives to the organization's needs. Basically, the objectives define how the organization needs to perform in the next 3-5 years in order to remain on-track to the vision.

Also included in this element is the one-year plan that gets even more specific regarding what needs to happen in the current year to remain on-track to the 3-5 year objectives. The one-year plan identifies the current year SQDCP targets, which defines how the organization needs to perform this year given its current processes and systems (assuming that regular problem-solving will be required to deal with the daily problems), as well as the 2-3 areas where a step-change in performance is required to stay on track to the 3-5 year objectives (i.e., kaizen/breakthrough problem-solving). Using an oil and gas producer, a current year target could be production of 25,000 barrels of oil produced per day (possible with current processes and systems), while a breakthrough could be the need to reduce cost per barrel from $24 to $18 within 3 years (which would require a step-change in processes or systems).

3. STANDARDS: Once the gaps and performance targets are clear, it is necessary to identify the standards that need to be met in line with business needs. An example of standards within an oil and gas operation could be that meeting a production target requires an offshore platform to operate at 95% reliability, which, in turn, requires a maintenance technician to change a pump filter in 24 minutes. In another example, a coffee shop could determine that, to meet customer requirements, all customers must receive their coffee within 4 minutes of walking into the shop, requiring the person taking the order to select any product on the order screen within 2 seconds. Setting standards requires a clear understanding of the business and continual improvement.

4. STANDARD WORK: Standard work consists of the instructions that, if followed, will enable the standards to be met. In the examples above, instructions provide a step-by-step description of the work to be done to change the filter in 24 minutes or serve the customer within 4 minutes. Two key points about standard work are (1) the instructions should be created and regularly improved by the people who actually do the work; and (2) the instructions must be clear and simple to follow. It is also important that the standard work is regarded as the best known way to perform the work today, and must be followed until a better way is discovered and the instructions are changed.

5. ACTUAL PERFORMANCE: Learning requires clearly and continually measuring the actual performance to understand where the gaps between performance and the standards exist. If actual performance meets the standards – the pump filter is changed in 24 minutes – then the thinking returns to step 2 to continually assure that business has not changed and that the standards still meet the business or customer needs.

6. IDENTIFY PROBLEMS/GAPS: The real power of lean thinking occurs when actual performance does not meet standards because this is where continual improvement truly happens. For the business to improve, we need people to quickly speak up when problems occur. Whether through an andon signal (lights and music that immediately grab attention) or dashboards that are updated frequently, the key is to find ways to make all problems highlighted quickly. To assure this happens, leaders need to encourage and recognize team members for identifying problems quickly. Taking it one step further, making problems visible should be an expectation of every person in the organization.

7. RESOLVE PROBLEMS: Once problems are identified – i.e., actual performance does not meet the standard – there needs to be a consistent way to understand and resolve the gaps. Rather than calling on black belts to come in and lead the process, lean requires that everyone become problem-solvers. Those closest to the work need to be actively involved in closing the gaps and, to make this happen, leaders need to teach and coach team members how to do it. In many cases, problem-solving leads to changing standards and/or standard work to ensure that improvements stick.

8. DO IT AGAIN: The lean system requires that the process never ends, so the team needs to continue to review business needs, set and revise standards, identify gaps in performance, and solve problems.

Not as Easy as it Sounds

Although following the lean system as described above appears fairly simple and straightforward, it is anything but easy. Each step requires transformation in leadership, thinking, and culture to be effective. Two areas that generally require significant change include transforming managers into coaches and making a culture where it is safe – and even expected – to make problems visible.

The all-too-common approach of focusing on the tools will make the application of lean to other industries difficult – if not impossible. Focusing on the philosophy and transformation in the way people think and approach the business, however, will make the application to other industries far easier and significantly more successful.

The Objective of Problem-Solving is Not Solving the Problem

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"The ability to learn faster than competitors may be the only sustainable competitive advantage" - Arie de Geus

One of the misconceptions that interferes with an organization's transformation toward lean thinking deals with the objective of problem-solving. People tend to focus problem-solving activities mostly on the business result, or solving the problem, and ignore whether or not any learning occurred while doing the exercise.  What many fail to understand is, when the focus of problem-solving is results, very little learning takes place, but when the focus is learning, more significant and sustainable results will follow.

It is strange to think that the main objective of problem-solving is not solving the problem, but the more one understands organizations and behavior, the clearer it becomes that sustainable improvement can only occur through continual team learning. When it is obvious that the only concern of leaders in a problem-solving effort is results, people will respond by showing positive results whether or not they are real or sustainable. Problem-solving will become nothing more than an exercise to get to the countermeasure as quickly as possible.

The Benefits of Learning

Some of the benefits of emphasizing learning during problem-solving include:

Improved understanding of systems and processes When done correctly, problem-solving requires looking at the issue from a number of perspectives to better understand how to approach it. It also involves understanding and proving the connections between potential causes and effects and, although it takes time to do this, it leads to increased understanding of the processes and systems that contributed to the issue. This learning leads to better problem-solving and greater improvements in the future – something that cannot occur without learning.

Improved understanding of the problem-solving process The more a team solves problems, the better everyone involved learns the process.  Rather than merely following the steps in a process, people start to learn why the steps are important, how they relate to the quality of the output, and where changes can be made to make the process better and faster.  When the focus is on getting to the countermeasure, the only learning that takes place is how to make an A3 look good. No useful learning will occur as people jump to the countermeasure and backfill the A3 to make it appear that the process was followed.

Learning stays with the team rather than with a single person The A3 (or whatever document is used in the process) from formal problem-solving is captured and maintained as a record of how the problem was defined, broken down, how the root cause was determined, the countermeasures selected, and the results.  In this way, when one or more people leave the team, the learning is maintained through the records and the countermeasures captured in standards related to the process. Also, the increased knowledge and understanding of the process throughout the team that was gained as part of the effort will not go away when one or two people leave.

Motivation increases as people learn and grow For most people, learning and contributing to improvement makes the work they do more interesting. When learning is the focus of problem-solving, the more energized people become and the more interested they are in driving improvements into the work they do.

Leaders Must Learn Also

Emphasizing learning rather than results takes patience and a belief that it will eventually lead to far greater and sustainable results.  Without this transformation, people will see that results are all that matters and respond accordingly. Rather than generate real results based on scientific analysis and concrete actions, however, they will likely be achieved quickly and be superficial and unsustainable. Problems will become hidden and not given the attention they require.

Slowing Down to Speed Up

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Borrowing From Neuroscience to Drive Kaizen Thinking

"If you are going to do TPS you must do it all the way. You also need to change the way you think. You need to change how you look at things." - Taiichi Ohno 

One of the most common issues lean coaches face when teaching structured problem-solving is keeping people from immediately jumping to countermeasures when addressing a problem. Touting the virtues of sticking to the process and mentioning that the countermeasure may be wrong is rarely an effective way to getting someone to forget what they already think is the answer and to take more time and effort only to arrive at the same conclusion. There are a number of reasons for countermeasure-jumping, and understanding the motivation behind the behavior can help people appreciate the importance of following the process. 

There are many reasons people jump to countermeasures rather than following the process to solve problems. The need to be an expert (for personal or cultural reasons) and being stressed or overloaded are two common reasons.  A third reason, which is the focus of this blog, comes from the study of neuroscience and our internal programming regarding how we make decisions. 

Fast vs Slow Thinking 

In his book, Thinking Fast and Slow, Nobel Laureate Daniel Kahneman presents the results of his research into decision-making. Kahneman presents two distinct processes in the brain that, although apparently designed to work together, often conflict with one another. The first, which he refers to as System 1, is the fast thinking process that runs on autopilot. The obvious purpose of the fast brain is to protect us from danger - i.e., we don't have to take the time to think about getting out of the street when a car is coming - and to keep us from having to relearn simple tasks each time we perform them. The fast brain is guided by intuition and habits, and takes virtually no effort to use. 

System 2 is the slow brain, and is used for issues that require deep-thinking logic and focus. It takes time and effort to use the slow brain, but it is the part of thinking that deals with complex issues and enables innovation and creativity to occur.   

The issue with all this, however, is that that the more the fast brain is used, the more it tends to dominate the slow brain and could, in fact, shut it down in most situations.  When applied to the workplace, the fast brain always wants to jump to countermeasures immediately.  

For a variety of reasons, many organizations tend to reward fast-brained people through promotions and bonuses because companies that want quick answers and immediate results do not value deep, careful thinking. Because of this, organizations that have not identified their few highly critical priorities will have cultures that lean toward fast thinking. 

Thinking, Reflecting, and Learning 

Kaizen requires slow thinking and reflecting in order to identify and challenge assumptions that are preventing effective and innovative countermeasures. This may be what Taiichi Ohno meant in the above quote when he wrote that TPS requires you to "change the way you think," since lean requires much more engagement of the slow brain. 

I believe that this is the reason kaizen is not natural for most people. Since most of us are overloaded in our professional and personal lives, we are dominated by our fast brains. As a result, we probably get more done by operating in this way - it's the quality of our work that we have to question. Getting people to understand kaizen requires making them realize this and to learn how to access their slow brains when approaching a problem. 

I spend a lot of time these days getting people to slow down when they're addressing problems.  If it's a small, one-time issue, I only try to get those involved to do a basic 5-why exercise to help them start to appreciate slower thinking without shutting them down completely. When dealing with the larger and more critical problems, however, I continually coach them to slow down and think about the steps in problem-solving before jumping to any conclusions.  It requires a lot more time and coaching to get a person or team to clearly understand a problem and think deeply about each step in the process. When people can start to understand the value of accessing their slow brains, the transformation (or "thinking differently" as Ohno stated) starts to occur. 

When you think about it, Toyota's 8-step problem-solving process is designed to encourage slow thinking. Clearly identifying the gap frames the process, and breaking it down requires looking at data and going to gemba to understand the issue from various perspectives before wasting time attempting to think about causes or countermeasures. Anyone who thinks an A3 can be completed in one sitting is being guided by their fast brain. And for people who do this, their fast brains will get a lot of exercise as they continue to address the same issues over and over again. 

The Big Gains 

Slow thinking is what leads to the big gains that lean thinking drives.  Organizations that approach lean without changing the way people think will likely end up disappointed and abandon the process as not applicable to their business.

A Solution Without a Problem

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“You are non-value added, Charles,” I was told. “Your sole job is to take care of the team member who is creating the value.” – Toyota Trainer to Charles Luttrell (from Toyota Culture: The Heart and Soul of the Toyota Way by Jeffrey Liker and Michael Hoseus)

One of the basic requirements for establishing an effective annual plan that many companies seemingly miss is a clear and consistent organizational purpose across the company.  Without clarity around why the organization exists, people will determine what is important based on their own perspective rather than that of the company, as a whole.  When this happens, it can lead to overloading people to the point where teamwork and performance is negatively affected.

Confusion around the purpose is what drives teams to create initiatives that may seem important to them but do nothing to help the company achieve its purpose.  The supply chain team implementing a new system for requisitioning material, the finance department changing the way expense reports are submitted, or process engineering installing robots on the shop floor are all examples of initiatives that may appear important to the teams driving them but can be unhelpful and disruptive to the teams working to produce products or serve customers.

What Problem Are You Solving?

When you get down to it, there are two basic jobs within an organization.  You either serve customers or help others serve customers.  Serving customers generally includes making products or delivering a service to end users – i.e., those things that generate revenue for the company.  Those who do this add value directly whereas everyone else delivers indirect value by helping those who deliver value solve problems and serve customers better.

Solving problems does not necessarily entail spending time and money on the latest technology or trend in the field.  It does entail spending time at gemba with those who provide value to understand their problems and find ways to help solve them.  Although it may involve implementing the latest technology, in many cases it does not.  It’s all about understanding and gaining agreement that a new project will solve problems and make life easier for those who provide value.  

When the purpose is clear to everyone in the organization, people will understand their roles and focus everything they do on improving the value the company, as a whole, provides.  Just as a company cannot hope to sell a product that customers are not interested in buying, a support function cannot hope to add value by selling a new initiative that its internal customers do not want.

I Already Do Lean

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“The first step is transformation of the individual.  This transformation is discontinuous.  It comes from understanding of the system of profound knowledge.  The individual, transformed, will perceive new meaning to his life, events, to numbers, to interactions between people.” – W. Edwards Deming

Facing resistance when introducing lean to an organization is common – and even expected.  Especially early in the effort, people will look at lean as a passing fad or not applicable to what they do.  A less common but just as destructive type of resistance put up by some people is that they already to lean.  Dealing with this excuse for opting out of the effort requires taking the time to understand whether it stems from fear of looking ignorant by needing to learn something new or if it is ego driven.

First of all, nobody “does” lean naturally.  Although some people have more of an inclination toward lean thinking than others, everybody needs some level of learning or coaching to develop it more deeply.  The conventional western approach to business over the last century runs so counter to lean that a deep level of reprogramming is necessary for most people.  The problem for those leading the transformation, though, is to convince those who already do lean that, although they may apply components of it to their work, the big gains from lean come when it is understood and applied as a system.

Telling these people that they don’t understand lean will only get them to dig in more deeply and further block the willingness or the ability to learn.  Helping people open up to learning about lean requires spending a significant amount of time with them to learn what they do and how they work, and using a questioning approach to get them to realize that lean encompasses far more than eliminating waste, and that they have much more to learn to realize its true benefits.  It can take a lot of time to do this but, in a way, it is like going to gemba for personal transformation because driving change cannot be done without connecting to those with whom you are working to change.

Clues to Form the Questions

Spending time with those who already do lean will provide clues as to where to begin formulating the questions and the approach to drive learning.  Some of the actions and practices to look at during the time you spend with the person include:

• Developing others is viewed as a high priority and there is clear evidence that it is actually being done;
• People on the team the person leads have a clear line-of-sight to the company’s vision;
• Interaction with team members is heavily oriented toward questioning to drive learning rather than advocacy and dictating orders;
• Problems are addressed using a structured approach rather than jumping to the answer;
• Decisions and actions are approached through the use of the Plan-Do-Study-Act (PDSA) cycle;
• People are comfortable openly reporting and discussing problems;
• There is a true connection to gemba that aids in setting team objectives and driving the type of support provided;
• The processes team members use to achieve results is emphasized just as much – or more – than the results themselves;
• The leader follows the same approach to addressing management or system-level problems as team members do for process problems;
• Team performance is increasingly more dependent on the system than the skills or personality of the leader.

There are obviously other areas one could look to for clues for driving the conversations with someone who already thinks they know lean, but the above are a good place to start.  The key for the person driving the change is to go to gemba with the people being coached to learn what they do, how they do it, and the type of results they are achieving.  The more information you have, the better you can direct your coaching and conversations toward getting the person to slowly lower his or her defenses and open up to learning.

Transformation Can Happen

It is very satisfying to see someone have a light bulb moment with respect to lean.  It is at this point when transformation begins and learning greatly accelerates.  Although some people will never open themselves up enough to truly learn, I have found that, as long as I’m willing to take the time needed and continue to learn and develop myself, I can achieve some level of progress with most people.

Is it Too Easy to Fire People?

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“I am convinced that nothing we do is more important than hiring and developing people.  At the end of the day, you bet on people, not on strategies.” – Lawrence Bossidy

How effective is your hiring process?  How do you know? If it was difficult or impossible to fire people after you hired them, would it change your process?

If it was a given that every hire would stay with the company until retirement, most companies would likely change their hiring practices.  The fact that we are able to fire people fairly easily, though, allows us to worry less about the effectiveness of the process and distracts us from addressing the real issues that affect long-term performance.

The objective of the process should be to recruit and hire people who have the right skills, are a good fit with the company’s culture, continually learn and develop, meet or exceed performance expectations, and stay with the company until retirement.  When this is understood, people begin to see that, whenever someone is fired or quits, the process has failed and the effort to find a replacement is rework.  The time and cost associated with dismissing an employee, and recruiting, interviewing, orienting, and training a new one is waste and would not have occurred if we hired correctly in the first place. 

Although a rather blunt way of looking at the issue, a company that truly wants to be the best has to hire the best; and “best” means those who meet the objectives described above.  Hiring is one of the most critical processes for a company, yet it is rarely taken as seriously as many other less critical processes.

Elements of Effective Hiring

The elements of an effective hiring process that are often missing include the following:

1. Assuring the Hire is Necessary: Although it is pretty common in most companies to justify the necessity of a new hire, it tends to stop there.  Fiscal responsibility should drive companies to always question whether hiring a new employee is necessary, but the emphasis on reducing headcount should coincide with tension to improve processes to the point where replacements are not always needed.  The focus should be improvements first, and hiring second.
2. Finding the Right Person: Wanting to hire a new employee quickly should never drive people to shortcut the need to find the right person.  It takes time to screen candidates effectively which, unfortunately, often leads companies to become impatient and hire the wrong person.  Concern about the extra workload caused by a vacancy should be dealt with accordingly (e.g., contract labor or temporarily shifting responsibilities), and any concern about losing a position by not filling it quickly is irresponsible and potentially destructive.
3. Training and Developing People: Training and developing people once they are hired helps assure they succeed in their jobs, grow and learn, feel respected, and reduces the chance they will leave for a job at another company. Although many companies talk about the importance of training and development, very few actually do it well.  Like any critical process, developing employees should have clear objectives, a defined method, effective measures, and the proper focus to assure it happens.
4. Measuring Effectiveness of the Process: Because the hiring process is so critical to the success of the organization, it is important to measure its performance and use the results to drive improvement. Some of the events that should trigger problem-solving include firings, resignations, and the need to hire leaders from the outside. The measure should be visible to everyone involved in the process so its objectives are clear and performance is visible.

When the culture is driven by a continual improvement mindset, hiring for any reason except replacing a retiree or to staff up for growth signifies a breakdown in the process.  If it were impossible – or extremely difficult to fire people – this concept would be much easier to accept.  As long as it remains easy to fire people, though, there will be little tension to improve the hiring process, and successfully driving a continual improvement culture within the company will remain elusive.

Why Companies Hire Poorly

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“A company should limit its growth based on its ability to attract enough of the right people.” – Jim Collins

When a company is buying an expensive piece of equipment, there is often a detailed process to justify the expenditure, study the alternatives, and gain approval.  Leaders throughout the organization are often aware of, or even involved in the process to assure it is done well and that the investment pays off for the company. 

Given the importance of the decision, this makes perfect sense.  What is baffling, though, is why so many organizations don’t place the same level of importance on hiring a new employee as they do on buying a new machine.  Although the amount of damage a poor hire can do on the organization is significant, the decision is often made quickly by a relatively small group of people.

Along with promoting and developing leaders, hiring is one of an organization’s most critical processes.  And as long as a company fails to recognize the importance of hiring, the chance of successfully driving and sustaining a culture of improvement is relatively small.

WHY WE HIRE POORLY

In my experience, there are four main reasons for poor hiring practices, and those organizations that tend to hire poorly often exhibit all four of them.

1. Don’t Know How: Many organizations just don’t understand how to find and screen candidates effectively to assure they fit into the company’s culture.  Just like the work done on the shop floor, screening and interviewing are processes that need to be standardized and continually improved to achieve consistent results.  Without a standardized process – and associated training – there is no way to assure that people throughout the company are using the same approach or that improvements are in hiring are sustained.
2. Don’t Realize it’s a Problem: Companies that do not track employee turnover most likely do not consider it important.  When continually reducing turnover is not considered important, employee satisfaction tends to be low and the associated costs tend to be high.  Besides the costs of rehiring and retraining new employees, there are significant losses resulting from low morale and the loss of knowledge when people leave.
3. Hire When it’s Too Late: There is an understanding in most organizations that bringing on a new employee is costly.  Because of this, the search begins long after the need arises.  When a team cannot keep up with its workload, there is often panic to bring in someone immediately to get the work back under control.  This panic can lead to cutting corners, hiring quickly, and unfortunately, bringing in the wrong person.
4. It’s Easy to Fire People: I have always felt that, if it was difficult to fire people, companies would take much more time to justify the need to hire a new employee and, when it was deemed necessary, would assure that the right person was ultimately hired.  In the machine example at the start of this post, companies tend to take more time to procure capital equipment because, once they make the purchase, they are stuck with it for many years.  If we approached hiring in the same way, the process would be taken more seriously and, most likely, produce much better results

IT’S ABOUT RESPECT

Successfully achieving and sustaining performance improvements cannot happen without the heavy engagement of the people in the organization.  And there is little chance that people will become and remain engaged unless they feel respected.  Making sure that the hiring process results in bringing in a person who has the right skills and fits with the company’s culture and values demonstrates respect for existing employees as well as the person being hired.

Why People Don't Develop

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“If we do not give people accurate feedback based on real behavior they are not growing and we are not respecting them. The job of a leader is not to put them in positions to fail, but to put them in challenging positions where they must work hard to succeed and still see how they could have been even better. “ – Akio Toyoda

_____

If you are a production manager and one of your machines develops a problem that is resulting in increased costs or poor quality, would you let the problem continue until the next time maintenance is due?  For most of us, the answer would be, “no.”  We would shut down the machine and fix it to stop the problem from continuing.

If you are a manager and one of your team members is having a behavioral or capability problem that is resulting in increased costs, poor quality, or missing commitments, what would you do?  Experience tells me that many would wait until the next performance review to point out the problems and work for improvement (oh, and assign a poor rating in the process).

One of the biggest problems facing organizations today in the drive to improve is the inability of many managers to provide regular and relevant feedback to team members and work with them to improve.  There are a variety of reasons for this but, unless we start to dig into the causes and address them, the problem will continue and our ability to drive and sustain improvements in safety, quality, production, and cost will be severely limited.

The Causes

Over the years, I’ve found many reasons for the lack of ability to provide effective feedback for team member development that occurs in many organizations.  Although most of the reasons are fairly simple to recognize, they are system-level issues and can be difficult to address.  Like any problem facing an organization, however, a focused effort with clear objectives can result in significant improvements.

The reasons many organizations are poor at developing people include the following:

• Leaders Don’t Know How: Coaching and developing people is not something that comes naturally to most people.  When we promote someone into a supervisory position, we need to develop his or her skills in coaching and leading a team.  We must help leaders understand the types of conversations to have with people and how to recognize when improvement is needed and occurring.  They also need to understand how to approach these conversations with respect and utilize questioning, rather than telling, to guide development.
• Inconsistent Leadership Styles: Variation in leadership styles is one of the most unrecognized and destructive problems in business.  Unless we have a clear idea of the competencies we want in the organization’s leaders, the resulting inconsistency will confuse people and lead to demotivation, high turnover, and poor performance.
• It’s Not Valued: Leaders are often not held accountable for development because it is not valued by the organization.  Organizations that take a cream to rises to the top approach to identifying leaders often follow a hands off approach to development creating an environment of competition and silos rather than teamwork and problem-solving.
• Poor Hiring Practices: If we continue to hire people who don’t fit into the organization’s culture, the problem will be overwhelming to those managers who truly want to develop those on their team.  Hiring a new employee is a much more important decision than many people recognize, and unless candidates are carefully screened for fit before they enter the organization, they can do significant damage before we realize we have a problem.
• Overemphasis on the Performance Review: Organizations that do not value development tend to put more pressure on completing performance review on schedule than worrying about whether or not it actually results in improvement.  In this type of environment, managers often feel they are fulfilling their responsibility as a leader by having one or two conversations per year related to development.

It’s a Daily Thing

Avoiding conversations with people related to areas to improvement need to happen every day in real situations.  Besides the effect this can have on the performance of the team and the organization, orienting these conversations toward truly helping someone develop and improve shows a level of respect that people will remember for years afterwards.

5 Characteristics of a Good Boss

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“The greatness in people comes out only when they are led by great leaders. We are all growing and learning, and we all need teachers and coaches to help guide us. We say at Toyota that every leader is a teacher developing the next generation of leaders. This is their most important job.” – Akio Toyoda 

There are numerous articles available on the subject of bad bosses. Besides the fact that these articles tend to be entertaining, talking and writing about a bad boss can be a form of therapy to deal with the stress caused by poor leadership.  

But what about good bosses?  Most people, at one time or another, worked for someone they would consider a good boss, but what is it about their style or approach that made them a "good."  Below is a list of the characteristics I have experienced throughout my career that I would consider make someone a good boss. I'm sure there are many others that can be added to the list, but these are the things that stand out when I think of the good bosses I've had over the years. 

1. Provides Regular Feedback and Coaching:  The bosses who provide continual feedback based on real behaviors and actions demonstrate a true interest in the development and improvement of those on his or her team.  On the other hand, waiting for the annual performance review to provide feedback on areas to improve is ineffective and turns it into more of a check the box activity or justification for a specific rating. 
2. Connects to the Workplace:  Good bosses go to the workplace regularly to understand what team members face on a daily basis.  The focus of the visits is how barriers can be removed, processes improved, and culture changed.  Bad bosses have "open door policies," which really means they are too busy to go to the workplace - and make team members come to his or her office to talk.  Rather than serving team members, the focus of a bad boss is much more on pleasing his or her boss.
   
3. Always Strives for Excellence:  A good boss continually drives team members to improve.  This drive for excellence applies to the boss as well as team members.  Bad bosses focus on cost-cutting rather than improvement to meet objectives. 
4. Question vs Tell:  Good bosses question team members to better understand issues and to help the team solve problems.  Bad bosses always have the answers and provide "solutions" to problems even when they don't completely understand the situation. 
5. Inspires: Good bosses continually help team members connect the work they do to higher-level objectives and the organization's purpose.  This gives meaning to the work performed and helps inspire people to continually improve.  Bad bosses don't understand or care about higher-level objectives and focus only on getting things done quickly and cheaply so they look good. 

The most telling sign of a good boss is that his or her power comes from something other than position.  When I think of the good bosses I've had over the years, it was always a win-win relationship I had with them.  They provided me with opportunities to develop and improve, and I worked hard to help make them successful.

Lean Leadership: From Doing to Coaching

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One of the most difficult aspects of transforming an organization toward a lean mindset is getting leaders to understand the importance of using questioning to develop team members.  It is difficult for someone who has been rewarded many years for being a problem-solver to suddenly shift behavior from solving problems to teaching others how to solve problems.  It can be a difficult habit to break that requires patience, perseverance, and a method to help leaders do it.

The Method

The best method I’ve found to teach leaders how to question is to begin with providing a clear and consistent process for problem-solving to be used throughout the organization.  When the steps for problem-solving are clear, leaders can question people about the process to understand how they are thinking and if they are approaching the problem in a way that will lead to improvement.

If, for example, the organization employs the Toyota 8-Step Business Practice for addressing problems, it is important for leaders to clearly understand the process, and commit to following the steps one-by-one to address problems.

Once the process is clearly understood, the leader can help team members approach problems by questioning them through the steps.  The leader should not do any of the problem-solving him- or herself, but learn to use open ended questions to guide the person’s thinking about the issue to be addressed.

Examples of some of the types of questions to use include the following:

• Why did you define the problem in this way?
• What data did you use to break down the problem in this way?
• What is the data telling you?
• Have you gone to where the problem occurs to see it for yourself?
• Have you talked to the people who are affected by the problem?
• Why do you think the countermeasure will actually solve the problem?
• How will you make sure that the improvement will be sustained?

Questioning a team member through the process will take longer than the leader solving the problem but in the long-run, the benefits to the organization of improving team problem-solving abilities is exponential.  In addition to improving the problem-solving skills of team members, the process also improves technical knowledge of the company’s processes, the value of which is immeasurable. 

It should be noted that effectively coaching someone through a problem sometimes requires that you let the person pursue a countermeasure that you feel is incorrect.  Besides improving process knowledge, failed countermeasures can do more to teach effective problem-solving than always being right.

Leaders Need Coaching, Too

Improving the ability to question rather than tell often requires coaching of leaders to help them understand how to do it and to break old habits.  This requires spending a significant amount of time with the leader to help them see when they could have used questioning rather than telling.  Breaking a habit that has been gone on for decades can take a long time, but with consistent coaching can be done.

It is difficult for some leaders to grasp the concept that they need to become teachers rather than doers.  In many instances, they will know what needs to be done to address a problem, and convincing them to do something that will take days or weeks rather than minutes to complete can be difficult.  When done well, though, the benefits to the organization of unleashing the problem-solving abilities of team members can be immense.

The Case Against the Flat Organization

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Since the 1990s, consultants and authors have been touting the benefits of the flat organization.  Among the advantages commonly associated with flattened organizations are improved innovation, empowered employees, and faster decision-making.  I’ve worked with many “flat” organizations over the years and, rather than improved flexibility and increased speed, found burned out managers, frustrated employees, and high turnover. 

Removing layers of management downplays the importance of the coaching and development of future leaders.  When a manager has a large number of people on his or her team, it is not possible to spend the time needed to develop problem-solving or leadership skills of team members.  As a result, the manager resorts to directing and problem-solving, rather than coaching, and employees feel stuck and left out of the process.

Flat organizations utilize the sink or swim approach to developing people - something I’ve never seen work effectively.  When people are left on their own to develop, they will do so in their own way based on their own experiences without the ability to see themselves objectively.  As a result, the company can lose control over its culture and systems resulting in deterioration in customer service and long-term performance.

Understanding the Problem

One of the reasons often given for eliminating layers of management is that managers get in the way and slow down processes.  Although often a true statement, eliminating layers is not addressing the root cause.  The company can benefit more by understanding why its leadership is ineffective, and why its processes and systems are slow, and developing countermeasures that effectively address these causes. 

Although there are many companies that do have too many layers of management, improving the situation requires identifying what the organization is trying to achieve and understanding and removing the barriers that are interfering with success – and this is not a quick process.  Firing several managers without addressing the real causes of poor performance can magnify the problems and, after a short-term improvement in results, end up in worse shape than doing nothing.

No Quick Fix

In spite of what many of those who tout flat organizations believe, managers do have a purpose in organizations.  Flattening the organization is a fad that ignores the importance of developing people and continually improving.  As companies like Toyota, Amazon, and Google have proven for many years, long-term success still comes down to effective leadership, respecting people, and a never-ending focus on improvement.

Using Dashboards to Develop Leaders

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It is pretty widely known that the role and responsibilities of a leader differs significantly in a lean environment.  As is often the case, though, knowing and doing are two different things.  Becoming a lean leader, like most of lean thinking, is a simple concept that is very difficult to apply.

Jeffrey Liker and Gary Convis wrote about the system of lean leadership in The Toyota Way to Lean Leadership.  In the book, they point out that the four basic responsibilities of a leader within a lean culture are (1) develop self; (2) develop others; (3) create alignment between vision and goals; and (4) drive daily improvement.  Although appearing to be fairly straightforward, putting these responsibilities into practice can be very difficult without understanding that lean is a system where the elements have to be applied together to successfully transform an organization.  Lean is like a Charles Dickens novel, where even the seemingly smallest details play a part in the story. 

What this means is that the leadership responsibilities listed above cannot be approached in isolation.  They work together, along with the tools and principles, to drive improved performance.  And focusing on the details while keeping the overall system in mind is not an easy thing to do.

I have found very few people today who don’t agree that lean makes sense for business.  Leading a team, plant, or organization, however, is a complex and challenging undertaking; and with a host of responsibilities and competing priorities and pressures, it’s not realistic to expect a leader to change his or her way of leading just because it makes sense.  The best way to help people understand how the work they do can align with these four responsibilities is to show them.  By going to gemba and demonstrating how the elements of lean work together to drive improvement, those you are coaching will begin to understand how the philosophy connects to real work. 

The Role of Dashboards

Dashboards are a perfect place to demonstrate to leaders how to fulfill the responsibilities of developing others, creating alignment, and driving improvement (and, more indirectly, developing oneself).  By creating a standard script and coaching leaders around the use of questioning based on data, you can help them gain comfort in the application of lean thinking through improved understanding of how the elements work together to drive improvement.

The questions I often use around dashboards include the following:

• What is the target? This question assures that the team is clear on what they is trying to accomplish.  It directly addresses one of the biggest problems in organizations that people “just know” what they are expected to accomplish by making the targets absolutely clear.
• Why? This moves the conversation from clarifying the target to assuring that it is the correct target.  To be truly successful, people need to understand why they are doing what they are doing, and clarifying the higher level objective helps drive alignment to the vision.
• What’s the gap? Effective problem-solving requires clarity around the gap between the target and what is actually happening.
• What are you doing about the gap? Actions to improve need to be directly aligned with the gaps in performance, and questioning the team leader on this can help assure that: (1) actions are being taken to close the gap; and (2) it is likely that the actions will be successful.  Asking how the actions were developed and assuring that they are focused on root causes will also help improve problem-solving capabilities. 
• How are the actions going? It should be clear from the dashboard which actions are being taken and how they are doing.  This is the conversation around leading and activity-based indicators that show whether or not the team is carrying out the activities they feel will address the root causes.  If the actions are being completed as planned, is it starting to close the gap?  If not, why not?  If so, what is the team planning to address next?
• What help do you need? A leader should always close the conversation with an offer of help to show that he or she is just as committed to improvement as the team.

The process can be demonstrated through a scripted conversation or by walking the leader through several dashboards to help him or her become more comfortable about applying it on a regular basis.  What is important is to understand that learning does not happen without action, and action requires that people know what they’re expected to do and how to do it.

A Deliberate & Calculated System of Improvement

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“A goal without a method is nonsense.” – W. Edwards Deming

One of the key aspects of lean that many people have difficulty grasping is that it is more deliberate and calculated than the traditional approach to business.  Once a target or objective is set, lean provides a framework for mobilizing and organizing the team to make it happen.  In a cultural sense, lean thinking leads to an almost obsessive drive to improve.

As an example, it is fairly common for leaders to set a vision for an organization that’s creative or inspirational, only to leave its achievement to chance.  The barriers and roadblocks to meeting the near-term targets become distracting and interfere with efforts to focus on longer-term objectives.

By What Method?

I remember hearing W. Edwards Deming repeat the phrase, “by what method?” during his seminars.  It is a simple question that is so critical to driving the organization toward achieving an objective.  In effect, it forces efforts to the process to be used to achieve desired results rather than focusing only on the result. 

When approached with a lean mindset, setting a vision is only the first step of a long and deliberate process of making it a reality.  The vision becomes more than a creative or esoteric statement that is only considered when remembered or convenient.  It becomes truly integrated into the organization’s thinking and everyday operation.

The process for making the vision – or any long-term objective – a calculated and deliberate effort includes asking the following questions:

• What are we trying to achieve? What is it we want to happen and by when? Clarify the objective in terms that everybody in the organization can understand.  This is where ambiguous or imprecise statements are translated into specific objectives (e.g., translating a 10-year vision into 3-year objectives).
    
• What’s the plan? What are the gaps between where we are and where we want to be and what are we going to do to close them?  At the highest levels, this includes determining and deploying the targets throughout the organization.  At the business and operational levels, it means determining the steps to achieve the targets.
    
• How are we going to measure progress? The long-term objectives are often expressed through lagging – or results-based – measures.  Although it is critical to understand and watch the lagging metrics, the information they provide is after-the-fact and too late to correct the problems that are blocking success.  Because of this, it is critical to establish leading measures that are closely tied to the plans.  When clear and well connected to the plan, the leading measures will provide information to the team early enough to change course before results are affected.
    
• How are we going to mobilize the team? This includes communicating the plans up and down the organization to make it very clear how the team expects to achieve the objective.  Most people understand the importance of communicating downward but, what is often missed is the importance of communicating the plan upwards through a catchball process.  Leaders should have a clear idea how the team expects to achieve the plan to feel comfortable that the objective is understood and that the effort will not compromise aspects of performance outside of the team.  Catchball is also an opportunity for the team to express concerns about meeting the objective, and to ask for help from leaders.
    
• How are we going to stay focused on the objective? How are we going to hold ourselves accountable?  Making a vision a reality requires much more than communicating or deploying the statement into the organization.  There needs to be a firm meeting rhythm around the objective to follow progress and determine actions when results are not occurring as expected.  It forces the leadership team to clearly understand where the organization is on its journey to achieve its purpose.
    
• What adjustments are needed to stay on track? Nobody understands the future well enough to develop an iron clad plan that will lead to long-term improvement.  Because of this, the journey will require adjustments along the way, and knowing when and how to adjust is critical to staying on track toward success.  Understanding when and what to adjust comes from successful application of the previous five questions.

The above questions comprise a system of improvement that makes the long-term objectives truly achievable.  The process can apply to local process improvements or the organization-wide drive toward the vision.  When applied correctly and consistently, it can create the discipline to stay focused on a vision and shift it from hopes and wishes to a deliberate and specific plan to improve.

Lean Leadership & Systems Thinking

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One aspect of lean that often gets overlooked is the depth of systems thinking required to be successful.  For a variety of reasons, people like to jump into the more visible and concrete elements of lean – like dashboards or problem-solving – without clearly understanding the organizational elements that are necessary to support and sustain continual improvement.

What is important to understand about the organizational elements is that they all fall within the responsibility of leadership.  Unless leaders are continually looking for problems in these areas, they can go undetected and destroy efforts to transform the company.  Leaders need to openly and honestly reflect on organizational issues to understand that addressing the problems is their responsibility.  When done well, continually improving the organizational issues will build a foundation that results in sustaining the transformation for many years.

Building the System

Establishing a systems thinking mindset requires the ability to comprehend the whole and how individual components work together for the benefit of the whole.  In real terms, this means establishing clarity around the purpose of the organization and understanding how each system, function, and team supports achievement of the purpose.  It also means establishing balance throughout the system to assure that no individual component becomes optimized at the expense of the overall organization.

People generally think of systems thinking in terms of value stream management and working to optimize the flow of material and information throughout the system.  Although value stream management is a critical element of continual improvement, there are other system-related issues that need to be understood and improved in order to sustain the gains made in throughout the process.  Without addressing issues like hiring, employee turnover, and leadership development, there is little chance that efforts to improve will truly make a difference to the organization.

Kaizen for Leaders

The overall organization is gemba for leaders and as such, needs constant attention and effort to improve.  Leaders must continually look for and remove the high-level systemic issues that interfere with the ability to improve.  Realizing, for example, that a poor hiring decision is the fault of the organization will drive kaizen toward improving the hiring process.  Just as problems on the shop floor require operators to act, hiring problems (as well as other organizational issues) require leaders to act. 

The organization is a system, and leaders must recognize their responsibility to improve the way the components work together to drive and sustain improvements in performance.  They must also understand that the responsibility of driving improvement never ends.

Beware the Lean Expert

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“The man who is too big to learn will get no bigger.” – Chinese Proverb

I started learning about lean during my college days when I took a business class on the subject of W. Edwards Deming’s theory of management.  Since that time, I’ve spent a significant part of my career working to transform organizations to become more focused on sustainable, continual improvement in the way they operate.  Among the many things I’ve learned on this journey is to beware of anyone who refers to him- or herself as a lean expert.

Lean is about striving for perfection - and strangely enough, about understanding that perfection will never be achieved.  The way to continually close the gap between the current state and perfection is to learn; and learning occurs through never-ending experimentation. 

If a company improves to the point of being recognized as an industry leader, and starts to think it has reached perfection, then further learning – and improvement – would stop.

The same applies to individuals.  I’ve run into many self-proclaimed “lean experts” over the years who think they understand lean so well that they visibly stop learning.  They attempt to drive lean thinking into an organization the way they’ve done it in the past and ignore the signs that identify problems.

THE NEED FOR HUMILITY

A requisite for continual learning is humility.  Unfortunately, the culture in many organizations interferes with the ability to demonstrate humility.  Openly showing problems and asking for help can be seen as weakness, which motivates people to hide humility and the associated learning that it can facilitate.

The way around this is to be wary of anyone who claims to be an expert – in lean or any other aspect of the business.  Continually question his or her statements and approach to help drive understanding of the gaps in performance, whether or not the gaps are obvious. 

I’ve been working to drive continual improvement into organizations for decades and find myself learning on a daily basis something I didn't previously understand.  When I look back at some of the things I’ve written in the past (something, by the way, that a writer should never do), I’m amazed at how little I knew at the time and how sad it would have been if I stopped learning.

Organizations that begin the journey to lean thinking often bring in experienced people to help with the effort.  I advise leaders of these organizations that they can avoid a long and painful journey by avoiding anyone claiming to be a “lean expert.”  Unless your name happens to be Deming or Ohno – and I’m guessing neither would really consider themselves experts – you have way too much to learn to use the term.