Lean Requires Deliberate Action

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It has been decades since we first learned about the Toyota Production System and how it contributes to the company’s quality, productivity, and competitive success.  And although some companies have done very well with lean, most have struggled.  There are many reasons for failed applications of lean, but one that gets very little attention is the notion that lean thinking has no room for generalizations when it comes to performance improvement.  Objectives must be clear and deliberate, and include appropriate plans and measures to assure success.

BEYOND THE VISION

While vision statements are sometimes directional and somewhat general, turning them into action requires clarity around expectations, including short- and long-range objectives in order to make them a reality.  In fact, one of the problems related to visions is that many lack sincerity and do not progress beyond the development of creative slogans and posters.  Within a lean thinking environment, a vision is a serious and deliberate commitment of what the organization expects to be in the future.

I once worked for an organization that determined its vision to be Clearly the Best!  This could be thought of as a general, feel-good slogan if it did not progress beyond creating the statement, but the leadership team that developed the vision spent the time to create a common understanding of what it will mean to be the best.  They rolled it out to the organization with a picture of where they needed to be ten years out, and specifically what needed to be achieved within the next 3-5 years, including:

• A Total Recordable Incident Rate (TRIR) of 0.45
• A 30% reduction in warranty claims
• On time delivery to promise date of 99%
• A 25% improvement in product development cycle time

By aligning the 3-5 year objectives with becoming clearly recognized by customers as the best, the team turned a generalization into deliberate objectives for the future.  Because competitors and customers did not remain static, the team was required to adjust its idea over the years of what it means to be the best, but it was always clear about what it meant at any given point in time.  Achievement of an objective usually meant setting the bar even higher to keep it moving even closer to the vision.  [It should be noted that the company’s mission was very clear which greatly helped the process by providing boundaries for the vision.]

ASSURING ALIGNMENT

In the above example, by creating specific long-term objectives, the team was able to quantify the milestones that needed to be achieved along the way to becoming the best.  Leaders mobilized the team around these objectives, resulting in plans and dashboards that monitored progress along the way.  Additionally, they provided opportunities for leadership development and coaching that proved invaluable for sustaining the gains.

If the vision is kept alive year-after-year by developing associated long-term objectives, it becomes much easier to assure that actions – from annual plans to daily problem-solving – are aligned and focused on continually closing the gaps between the present and the future.

Consider the following vision statements:

• To be recognized as a trusted partner by customers, communities, and suppliers in all areas we operate;
• We will be the leader in researched-based education;
• To consistently provide products that make life healthy, exciting, and rewarding

 It is easy to see why these statements were created but unless they are associated with long- and short-term objectives, they are not deliberate statements about the future.  Developing the vision is important, but it must constitute a serious commitment and be followed up with deliberate actions and measures to prevent the exercise from becoming futile.

Are We Happy With Mediocrity?

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“Nobody gives a hoot about profit.  I mean long-term profit.  We talk about it, but we don’t do anything about it.” – W. Edwards Deming

W

hy do so many companies seem to be happy with mediocre performance? People generally consider the idea of having it all – perfect safety, high quality, short cycle times, low costs – as something that is impossible to achieve.  As a result, the bar is set low and everyone feels good when the low targets are achieved.

So often, it is our experience that interferes with moving to the next level of performance. We don't set aggressive targets because we know they are impossible to achieve and, in the end, we don't want to be disappointed or suffer the consequences of missing a target. As a result, we trudge along with average results and view many problems as inevitable or out of our control. If we're lucky, our competitors operate in the same mode. If not, we fall further and further behind until we are either acquired or forced to close our doors.

Energy Can Be Created and Destroyed

A group-wide acceptance of problems as inevitable is what causes people to lose their energy and inspiration. When one views significant improvement as impossible, intrinsic motivation wanes and extrinsic motivation – e.g., compensation – dominates. And the longer this type of “it happens” mentality continues within a company and the more deeply engrained it becomes in the culture, the more difficult it becomes to change course.

Leaders can stop or prevent mental mediocrity by first realizing that their own behaviors and the systems they created may at the root of the problem. It's not necessarily easy to do, but letting go of some traditional beliefs and methods of management can begin to drive the type of change that can energize improvement efforts and give people the confidence that they can have it all.

To do this first requires that leaders believe that problems are not inevitable and that the company has the ultimate control over its own future. They must fundamentally believe that they can have it all.

Stretching Without Breaking

Leaders have to trust that the people in the organization possess the talent to successfully tackle the difficult problems facing the company. They must often develop this ability, though, by stretching people and encouraging them to accept challenging projects and targets, and coaching them in their efforts to succeed. People won't always be successful in achieving the target (if they are, they're probably not being stretched enough), but the learning and development that occurs with each project is invaluable to tackling future problems and opportunities.

A stretch target refers to a target that is difficult, but not impossible to achieve and, although you can't stretch people all the time, you've got to make sure there is enough tension within the organization to keep people developing and the company's performance improving.

Getting people to accept stretch objectives assumes that they will not be penalized for missing a target. Reward systems need to support development and participation in stretching the organization rather than merely meeting a target. If you encourage people to stretch but continue with a reward system based on meeting targets, nothing will change. People will continue to pursue safe targets and push back on any attempt to stretch. In the end, mediocrity will reign.

More often than not, organizations cause their own problems. The effects of problems caused by the external environment tend to pale in comparison to those created on the inside. Understanding and accepting this, however, often requires a shift in thinking toward the idea that mediocrity is unacceptable and that the organization can, and will, have it all.

When Lean Fails: The Common Causes

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Many companies today are jumping on the lean bandwagon and expecting huge cost reductions as a result.  Unfortunately, many of these companies will never see the type of improvements they expect from lean, and their leaders will likely become disappointed and frustrated, and eventually abandon the effort.

There are a number of reasons companies fail with lean.  What I present here are the causes I’ve seen over the years that are the most destructive and the most difficult to resolve.  It is important to understand these causes and work to prevent or address them early in the process in order to initiate the type of transformation that will lead to a more competitive and stronger organization in the long run.

1.       Underestimating the Transformation
Most leaders tend to underestimate the level of transformation required to create a lean thinking culture within the organization.  Lean is not something you “implement” or use when convenient.  In virtually all cases, it involves a dramatic shift in the culture to drive a new way of thinking and approaching work.  As such, it requires transformation in the systems for leadership, training and development, recruiting and hiring, promotions, and others before one can expect to see results that have any chance of being sustainable.

2.       Delegating the Effort
One of the major differences between lean and improvement methodologies like six-sigma is that it requires the involvement of the organization’s leaders to be successful.  As noted above, lean requires a fairly significant transformation in order to be successful and this can only be done by those at the top because they are the people who are in the position to make it happen.

3.       Humility
Arrogance is one of the biggest killers of a lean culture.  Built on the Plan-Do-Study-Act (PDSA) cycle, lean is about continual learning.  I have seen many organizations over the years that had started well with the effort but, after a few early successes, became overly confident and killed the transformation.  The saying that the man who is too big to learn will get no bigger applies to organizations as well as individuals. 

The most effective leaders I have worked with are those who accept responsibility for the organization’s problems and realize that it is they who need to change in order for the organization to change.

4.       Patience
The extent of change in systems and behaviors required to be successful with lean takes time to achieve.  Although there will undoubtedly be early successes, the ability to sustain the successes and drive others will not happen without continual effort to shift thinking.  Especially when a crisis occurs, people will go back to their comfort zone, which most likely involves how they behaved before learning about lean.

The key is to never let up by continuing to reflect and drive change through the conversations and actions that occur every day.

5.       Consistency
Lean requires clear alignment from the organization’s purpose to the work performed by people every day.  In order to achieve and maintain this alignment, the organization must have a clear and constant purpose that is motivating and well understood by everyone.  Doing this well requires a significant amount of effort by the leadership team – especially during bad times when many organizations find it easier to abandon the purpose in order to maintain profits and short-term goals.

Leaders must be enlightened enough to understand that, although success will not come easy, it is possible to transform the company into a stronger and more successful organization.  Looking out for the causes of failure can save a lot of frustration early in the process and greatly improve the chances for success. 

Did Ohno Miss Something?

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“The basis of the Toyota production system is the absolute elimination of waste.” – Taiichi Ohno

Every now and then, I like to go back and reread books I’ve read in the past to be reminded of important points that I’ve either forgotten or just missed the first time around.  This is particularly true of books by, or related to W. Edwards Deming, Peter Drucker, and Taiichi Ohno.  Recently, I reread Ohno’s The Toyota Production System: Beyond Large-Scale Production.  Each time I read this book, I get a better understanding of the thinking behind the development of TPS, including how I can address a number of organizational problems I face that I’ve been unable to resolve.

This time around, though, there was one point that kept coming up and I couldn’t get past.  Throughout the book, Ohno repeats the idea the TPS is completely about eliminating waste.  The issue I had with this is that, in my experience, people who focus lean efforts only on waste tend to get overly focused on the tools and end up working a number of disconnected problems that result in little sustained improvement.

A more subtle message in the book that I don’t believe gets as much attention as the elimination of waste is the challenge that Kiichiro Toyoda put forth regarding the need to “catch up with America in three years.”  Ohno writes very fondly about Toyoda, including how important he was to Japanese industry and the development of TPS.  He credits Toyoda’s statement as being inspirational, but rather than being the drive for the development of TPS, translates it into a call for the elimination of waste.

So Much More than Waste

Perhaps Ohno’s view of waste is more complex than most people can truly comprehend, but I think that the message of using lean to reduce waste has gotten so watered down that most companies fail to achieve the big gains that a true transformation can achieve.

When the focus is waste reduction, lean can easily become a toolbox to reduce costs.  In my experience, every organization that turns its lean effort toward cost reduction fails to sustain the improvements and eventually drops the effort when something else draws its attention.

I contend that the focus of lean should be the company’s vision.  This assumes that the organization has a vision and that it’s truly inspirational.  In Toyota’s case, the vision was to catch up with America.  Other companies that have been successful with lean tend to have equally inspirational vision statements.

Deming said that a company’s vision is a value judgement and must include plans for the future.  This means that it includes much more than profits or share price.  It must relate to providing better and better value to the company’s stakeholders, including customers, employees, suppliers, the community, and shareholders.  It is the focus on improving the value to all stakeholders to a level never before achieved (or even conceived) that provides inspiration. 

When the organization has a clear statement that inspires people, lean becomes the vehicle to make it happen.  It provides a method for everyone in the organization to align efforts and work together to drive sustained and never-ending improvement.  The effort begins with the vision and translates it into more and more detail as it works through the company’s long-term objectives, annual plans, dashboards, meeting rhythm, and daily problem-solving. 

It is through the alignment of these efforts, beginning with a clear and inspirational vision, that lean enables innovation and an obsessive focus on closing the gaps that are truly important to the organization.  And when lean efforts are anchored by the vision, people will not be distracted by the numerous management fads that can derail the effort.

What Did Ohno Mean?

We’ll never get inside of Ohno’s head to understand whether or not the vision of catching up to America in three years is what truly inspired the development of TPS.  It is only my interpretation that the vision is what leads to sustained gains and what drives lean at Toyota.  Perhaps I’ll see this more clearly the next time I read the book . . . or perhaps I’ll find something else I completely missed this time.

Is it Better to Work on Strengths or Weaknesses?

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It takes far less energy to move from first-rate performance to excellence than it does to move from incompetence to mediocrity. – Peter Drucker

Throughout my career, I’ve put a lot of effort into overcoming my weaknesses.  As a result of coaching and reading numerous books and articles on self-development, I have always viewed my weaknesses as barriers to success and something that I needed to work hard to overcome.  I’ve recently begun to wonder, though, whether focusing too heavily on my weaknesses took time that could have been better spent developing my strengths.

In The Effective Executive, Peter Drucker wrote that, by focusing on our weaknesses, the best we can achieve is mediocrity.  On the other hand, working to further developing our strengths can result in greatness.

Most people excel in the areas that motivate them.  Alternatively, weaknesses tend to come from the things in which people are not really interested.  Focusing attention on developing the things people either can’t improve or aren’t interested in improving can lead to frustration, stress, and an overall lack of motivation.

People are motivated when they are able to do meaningful work, learn and develop, and have fun.  And continually developing in an area of strength and utilizing the strength to contribute to an organization’s success help make this happen.

Addressing the Organization’s Weaknesses

It is obviously important to understand and continually close the critical skill gaps that exist within an organization.  Doing this effectively requires hiring the “right” people and continually making them “more right.”  One of the critical objectives of hiring is to put together a team where individual strengths complement one another and people are able to effectively cover each other’s weaknesses, but focusing the hiring process on minimizing the organization’s weaknesses, however, will never lead to greatness.

The performance review process in most organizations targets an individual’s weaknesses.  Although strengths are usually identified – although more in terms of results than the fundamental strength that led to the result – the individual is often expected to work on the weaknesses before the next review.  There is rarely conversation about how the person can further develop strengths during the coming year.

Knowing Your Strengths

Developing your strengths assumes that you know your strengths.  For most of my career, I have approached people and asked for feedback and coaching about my work, interactions with others, and overall performance.  Whenever I have these conversations, however, I try to get the other person to talk about the areas in which I need to improve – in other words, my weaknesses.  Lately however, I’ve tried to turn the discussion around and have asked for feedback on my strengths.  What I’ve found is that it puts the other person much more at ease and comfortable giving me the feedback I need to improve.

Although this has helped improve the conversation, I have found that it is important for the other person to know that I’m not looking for compliments.  I am looking for feedback on my areas of strength where, if I got even stronger, could greatly help the organization and my own career.

Like anything, this type of conversation takes practice to provide real value, so it is important to stick with it and be consistent about holding the meetings.

PDSA to Understand & Develop Strengths

To better understand strengths and weaknesses, Peter Drucker suggested writing down goals related to a specific objective or project.  After six months or so, he recommended returning to the list and reflecting on which goals were achieved and which were not.  After doing this over a period of time, a picture will start to emerge that identifies strengths and weaknesses.  In addition to showing strengths and weaknesses in execution, it will show how strong the person is in planning and selecting the right things on which to work.

This is closely aligned with W. Edwards Deming’s Theory of Knowledge and the Plan-Do-Study-Act (PDSA) Cycle.  Within a PDSA mindset, learning only takes place when the hypothesis is clear, which means that the person or team clearly and consciously understands the expected results from a given action or plan.  I believe Drucker’s advice deals with applying PDSA on a personal level to drive learning.

For this approach to be successful, I believe that the list must be remain personal.  As soon as something like this becomes public or part of a person’s performance review, there will be a tendency to skew results and show more success than really occurred and, as a result, interfere with reflection and learning.  Most organizations are not mature enough in their thinking for people to be truly open about their performance and, in particular, their weaknesses. 

It’s Not All or Nothing

Focusing on your strengths does not mean completely ignoring your weaknesses.  This is not about developing knowledge or a particular skill.  It is about using knowledge and skills to be successful.  If you have a weakness that is interfering with success, the more you know about it and address it, the more successfully you will be.  The key, though, is to avoid spending significant time overcoming a weakness.  Once it is addressed to the point where it no longer interferes with using your strengths to be successful, stop worrying about it and refocus on your strengths.

Confidence and Humility: Two Critical Leadership Characteristics

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There are many traits that make one an effective leader.  Among the most important of these are confidence and humility, two attributes that many think cannot coexist in the same person.  I have found, however, that confidence and humility actually work together to improve the ability to lead and, although some people tend to possess these traits more naturally than others, they can be developed through effective coaching and feedback.

Confidence enables a leader to possess an unwavering commitment to purpose and direction of a team, while humility opens the leader up to continual learning.  And when defining confidence as self-assurance resulting from demonstrated capabilities, it is not possible to possess or have true self-assurance without the commitment to continual learning.

CONFIDENCE

W. Edwards Deming listed constancy of purpose as the first of his 14 points for effective leadership and lack of it as a deadly disease or barrier to improving business performance. Without clarity and confidence in the purpose of a business, a leader and/or those within the organization will continually question the direction and continually jump to the issue of the day resulting in very short-term, if any, success.

Confidence resulting from true abilities and understanding of the business, on the other hand, can give the leader the assurance that the purpose is correct, and prevent the daily distractions from taking the organization off course.

Another aspect of confidence is the belief that developing the abilities of team members is not a threat to the leader’s power or position, but a necessity to maintain it successfully.  A confident leader makes developing people, including the next set of leaders, a top priority for the business. 

Many people tend to confuse confidence and arrogance.  The characteristics of confidence that make it a vital leadership trait are not present in ones who display arrogance.  Discussions that include condescending remarks, as well as an overall lack of focus on developing others are clear signs of arrogance rather than confidence.  Conveying negative energy, a lack of openness to questioning of decisions and actions, and overall uncomfortableness are other characteristics of arrogant leaders.

Basically, people want to be around confident leaders but will do whatever they can to avoid arrogant ones.

HUMILITY

As mentioned above, humility gives people the belief that there is much they don’t know and lead to the desire to continually learn.  Humility enables a leaders to comfortably use inquiry when attempting to investigate a problem or develop the skills of team members because they don’t worry about others questioning their knowledge or abilities. 

Leaders who lack humility have trouble with structured problem-solving because of the tendency to jump to the countermeasure without truly understanding the root causes of a problem.  The kaizen process only works when an individual or team go into it with an open mind and the realization that they don’t always know the answer.  To do this effectively requires humility.

WORKING TOGETHER

When possessed together, humility and confidence can drive leaders toward constancy of purpose for the area they lead, along with the PDSA mindset needed to continually adjust the approach to remain on course.  When the leader models these behaviors regularly, people will be more receptive to following him or her and adopting the same traits in their own work.

A Simple Method for Achieving the Vision

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“The best way to predict the future is to create it.” – Peter Drucker

Many companies today have vision statements that are well-written and effectively describe future organizational aspirations. One has to wonder, though, that as common as they are, and as long as organizations have been doing vision statements, why so many companies continue to have trouble staying focused and miss the mark. Rather than staying focused and driving toward the future, organizational ADHD takes over and the vision turns into a virtually meaningless slogan.

One of the biggest reasons for failing to achieve the vision is a lack of understanding and appreciation of what a vision can truly do for an organization. A vision should be carefully created around what the company is expected to become over the next 5-10 years (or whatever time period makes sense for the company). It must be meaningful and able to drive all planning and improvement activities for the organization. It is a deliberate aspiration for the company; not something to be used only when convenient.

A Simple Solution

Achieving the vision is a simple process of understanding where the company wants to go, where is currently is, and continually closing the gap between the two. Just because the process is simple, though, does not make it easy. Without keeping the approach simple – and frankly most companies do not keep it simple – there is no chance of making it successful.

This post is meant to address the how of achieving the vision rather than the what. There is a process for creating effective vision statements that some leaders have obviously done very well. The method covered here assumes that the vision statement is one that clearly and effectively describes what the organization wants to become in the future.

1. Define the Gap In the same way that a problem on the shop floor requires first to define the gap, achieving the vision requires understanding how far the organization is from the its ideal targets.
   Determining the gap involves breaking down the vision, which is often stated as a generalization, into specific 3-5 year objectives (which often include targets for safety, quality, production/schedule, and cost, although other areas can be covered). The objectives are regularly compared to current performance to determine the gaps that needs to be closed to move the organization closer to the vision.
2. Set Annual Targets The 3-5 year targets become annual targets for different areas of the organization. Individual teams create their plans to achieve the targets, keeping the leadership team in the loop throughout the year.  The annual targets are deployed through the catchball process to ensure buy-in throughout the organization and to give the leader confidence that those accepting the objectives understand the intent as well as the targets.
3. Establish Regular Meeting Rhythm There needs to be regular meetings to ensure: (1) the annual targets are being met; and (2) the organization is closing the gaps toward the 3-5 year objectives and ultimately the vision. The meetings are focused on problems in achieving the targets and closing the gaps toward the vision. The term rhythm is important here because the meetings need to happen on regular intervals based on the pace of the business. The key is to meet frequently enough to allow corrections to be made before things get too far off course.
   It is also important to remember that the rhythm meetings are not witch hunts. They are meant to ensure that problems are being handled effectively and to identify where additional help is needed. To keep the meetings focused, it is necessary to run them from the dashboards and only refer to the plans when needed to address a particular problem.  This keeps everyone focused on the same things, looking at the same data, and removes debate and confusion about where the problems lie.
4. Repeat the Process Steps 1-3 need to happen every year to keep the team focused on the vision and to make sure the gaps are closing effectively.

The above process is a method that successful companies have used to turn their vision from a generalized statement of hopes and aspirations into a deliberate attempt to create the future. Developing and communicating the vision, when done correctly, can be energizing and motivating for the organization. Without a process for making it happen, though, the motivation, as well as the improvements driven, will likely not last.