Lean Leadership and Culture

April 2006
John Shook
JOHN SHOOK
Lean Transformation
My hypothesis
Lean will work anywhere
Any industry,
Any location, any culture
JOHN SHOOK
Culture
The pattern of basic assumptions that a given group has
invented, discovered or developed in learning to cope with its
problems of external adaptation and internal integration and
that have worked well enough to be considered valid, and,
therefore, to be taught to new members as the correct way to
perceive, think and feel in relation to those problems. Edgar
Schein
JOHN SHOOK
Where Do You Start Either? Both at once?
Change Culture
First
Change System
First
Lean Enterprise Transformation
JOHN SHOOK
JOHN SHOOK
The NUMMI Example:
Lean Success with a UAW Workforce
From GMs worstplant:
Quality
Workforce
To GMs best plant:
Quality Equal to Takaoka J apan
Productivity Close to Takaoka J apan
JOHN SHOOK
The Thinking Production System
Just in Time Just in Time
The right part The right part
at the right time at the right time
in the right amount in the right amount
Continuous Flow
Pull System
Takt Time
Leveled Production Leveled Production
Jidoka Jidoka
Production Lines Production Lines
That Stop for That Stop for
Abnormalities Abnormalities
Automatic Machine Stop
Fixed Position Line Stop
Error Proofing
Visual Control
Labor-Machine Efficiency
Standardized Work Robust Products and Processes
Preventative Maintenance; 4S Supplier Involvement
Best Quality Best Quality - - Lowest Cost Lowest Cost - - Shortest Lead Time Shortest Lead Time
Through Shortening the Production Flow By Eliminating Waste Through Shortening the Production Flow By Eliminating Waste
Built Built - -in Quality in Quality
Operational Stability and Kaizen Operational Stability and Kaizen
Getting people
to think and
take initiative
is the key!
JOHN SHOOK
A Look at Leadership at Toyota
JOHN SHOOK
The Lean Leader leads:
By Kaikaku
By Kaizen
Lean Leadership
JOHN SHOOK
In Toyotas early days, its most formative days, the Toyota we know
today was created by dynamic leaders who demanded radical
improvement in each core enterprise function.
Most of us here have heard all about Taiichi Ohno creating TPS in
production.
But, equally dynamic leaders were leading equally radical change in
product development and sales & marketing.
These were Toyotas Kaikaku leaders.
Lean Leadership
JOHN SHOOK
Most highly successful companies were created by Kaikaku leaders.
This is familiar to us, this is the type of leader most business and
leadership books write about.
Henry Ford, Alfred Sloan
Thomas Watson, Bill Gates, Steven J obs, Michael Dell
J ack Welch, Sam Walton
Lean Leadership
JOHN SHOOK
What is less discussed than the breakthrough success of the Kaikaku
Leader is the role and success of the Kaizen Leader who must come
along after the breakthrough leader to build systems and processes
for sustainability.
How different would Ford be if Henry had turned operations over to
Edsel?
How different would GM be had Alfred Sloan not come along after
Billy Durant?
How different would Toyota be if Kaizen Leaders had not followed
Ohno and the others at Toyota?
Lean Leadership
JOHN SHOOK
Leadership:
Three Models
Old DictatorStyle: Do it my way
1980s EmpowermentStyle: Do it your way...
Lean Style: Follow me
JOHN SHOOK
Leadership at Toyota
We have all been learning about Lean or TPS for quite a long
time.
You may knowTPS.
What you may not know is that:
Not everyone at Toyota knowsTPS.
Yet, everyone in Toyota even outside manufacturing
shares a common approach or thinking to their work.
JOHN SHOOK
Leadership at Toyota
I expected strong leadership. I found that.
I expected participation in decision-making. I found that, too.
But, the ways those two dynamics meshed differed greatly from
anything I had learned or expected.
JOHN SHOOK
Kan Higashi to Gary Convis
Lead the organization as if you have no
power."
JOHN SHOOK
Leadership at Toyota
Responsibility = Authority
I expected bottom-updecision-making. Thats not exactly
what I found.
I expected a measure of top-downauthoritarianism. I didnt
exactly find that either.
Rather, I found a dynamic system in which processes were
usually well-defined and individual responsibility was almost
always clear.
Authoritywas rarely an issue emphasis was on doing the
right thing,not establishing ones rights (authority).
JOHN SHOOK
Prototypical case of responsibility without formal authority: the
Toyota Chief Engineer.
The Chief Engineer says: I have no authority.
Everyone else says: The Chief Engineer is the most powerful
person in the company.
They are both right. The CE must lead by:
being knowledgeable, being right, fact-driven, an expert
negotiator, strong-willed yet flexible, persuasion.
Leadership at Toyota
Responsibility = Authority
JOHN SHOOK
Chief Engineer or Shusa System
Body
Body
Interior Chassis Elect. HR
Interior Chassis Elect. HR
Eng.
Eng.
JOHN SHOOK
At Toyota, the burden of proofis clearly on the subordinate, who
must justify why a given proposed action is necessary.
Managers in Toyota rarely say Yeseasily they usually simply ask
Why?
But, conventional managers are forced to explain to subordinates
why they should not pursue a given action.
This is a huge difference in determining corporate focus.
Leadership at Toyota
The Why? Technique
JOHN SHOOK
And each justification is rooted in actual practice, in the results of
actual activities.
And it applies to each and every decision, ensuring true
organizational learning at every step.
Leadership at Toyota
Decision-making
JOHN SHOOK
Decision-making and all actions revolve around planning and
problem-solving.
It is assumed that there will be problems, that everything will not go
according to plan.
No problem is problem.
For the system to work, problems must be exposed and dealt with
forthrightly.
Hiding problems will undermine the system.
Leadership at Toyota
Decision-making and Problem-solving
JOHN SHOOK
Toyotas way provides extraordinary focus, direction, control.
No excuses the flip side of no blame
While at the same time providing maximum flexibility -- Because no
one ever tells anyone exactly what to do.
Tremendous reliance on individual initiative
Yet, no one can move freelywithout justifying each action to
his/her manager.
This is a huge difference in determining corporate focus.
Leadership at Toyota
Control with Flexibility
JOHN SHOOK
Excuses
Barry Melrose (Canadian Hockey coach):
The coachs job is to take excuses away from
the player no travel problems, no
equipment problems, no bad practices, no
bad game plans so that there is nowhere
for the player to look but in the mirror.
JOHN SHOOK
Toyotas way provides extraordinary focus, direction, control.
While at the same time providing maximum flexibility
Since managers try to avoid telling people exactly what to do, yet
no one can move freelywithout justifying (explaining why) their
actions to his/her manager.
This is a huge difference in determining corporate focus.
Leadership at Toyota
Control with Flexibility
JOHN SHOOK
Decision-making Responsibility
In a traditional functional/hierarchical organization:
Position establishes (or seems to) authority to make decisions.
In cross-functional organizations, this causes confusion,
frustration, and breakdown of the decision-making process.
In a value stream organization:
Position establishes responsibility to get decisions made.
JOHN SHOOK
Leadership at Toyota
P-D-C-A
Toyota would say this is nothing more than the P-D-C-A
management cycle they learned from Dr. Deming.
Yet, my own observations say this is precisely the thing that most
companies cant seem to do.
Why?
Surely one major reason for this is the way we lead and manage.
JOHN SHOOK
The Leader as Dictatorof the old days tried to tell everyone what to
do.
No transfer, or Cascade of Responsibility
The Leader as Social Workerof the 80s and 90s just set goals
(MBO) and let everyone do as they pleased.
Loss of focus, direction, control
Lean Leadership
JOHN SHOOK
The Lean Leader leads a very different way:
It is as different from the commonly accepted
notion of the enlightened modern manageras it
is the old command and control dictator.
Lean Leadership
JOHN SHOOK
The Lean Leader leads a very different way:
By setting the vision (more why than how)
By building systems and processes that cascade
responsibility and develop people
By persuasion
by example
by being knowledgeable
by getting into the messy details
by coaching and teaching
- through PDCA learning cycles
- through questioning
Lean Leadership
JOHN SHOOK
Toyota is Toyota.
We can learn from them, but we cant copy them exactly.
How can we operationalize the same principles in our own
companies?
What can we do??
JOHN SHOOK
ACTION
CHECK
PLAN
DO
GRASP the SITUATION GRASP the SITUATION
HYPOTHESIS
TRY
REFLECT
ADJ UST
P-D-C-A Cycle
JOHN SHOOK
From LEAN to LEARN
Arguably what Toyota accomplished in its
early days that has enabled it to continue to
thrive is simply that it learned to learn.
JOHN SHOOK
Toyotas Cheryl Jones
Continuous improvement comes from making
mistakes and learning from them."
JOHN SHOOK
From Organizational Learning to Operational
Learning
What do we know about how people learn?
People learn:
Through experience
Through mistakes
Through trail and error
How can we build structured opportunities for people to learn
the way they learn most naturally?
P-D-C-A as a model for OPERATIONAL LEARNING
JOHN SHOOK
FOCUS
Sr.
Mgmt.
Front
Lines
System Kaizen
System Kaizen
Eliminate
Eliminate
Muri
Muri
and Mura
and Mura
Process Kaizen
Process Kaizen
Eliminate
Eliminate
Muda
Muda
Middle
Mgmt.
JOHN SHOOK
Impact
Role of and Impact of Lean on
Leadership Levels
A Difficult Struggle at the Mid-management
and First Line Supervisory Level
FRONT LINES
SENIOR
MANAGEMENT
MIDDLE
MANAGEMENT
MUST PROVIDE VISION
AND INCENTIVE
MUST DO
MUST LEAD THE ACTUAL
OPERATIONAL CHANGE
Likes
the involvement
Likes the results
Left with changed,
uncertain role
Role
Eliminate Instability
and Overburden
Eliminate Waste
JOHN SHOOK
Role of and Impact of Lean on
Leadership Levels
A Difficult Struggle at the Mid-management
and First Line Supervisory Level
FRONT LINES
SENIOR
MANAGEMENT
MIDDLE
MANAGEMENT
MUST PROVIDE VISION
AND INCENTIVE
MUST DO
MUST LEAD THE ACTUAL
OPERATIONAL CHANGE
Likes
the involvement
Likes the results
Left with changed,
uncertain role
Role Impact
Hoshin
Kanri
A3 and
VSM
Standardized Work
JOHN SHOOK
Hoshin Kanri (Policy Deployment)
Cascade Structure
POLICY
POLICY POLICY
POLICY
POLICY POLICY
POLICY POLICY
POLICY POLICY
POLICY POLICY POLICY POLICY POLICY
PDCA PDCA PDCA PDCA PDCA
CEO/COO
FUNCTION
DIVISION
DEPARTMENT
GROUP
INDIVIDUAL
Basic direction assured throughout the organization
Involvement at every level
JOHN SHOOK
Title: What you are taking about.
Background
Current Situation
Goal
Analysis
Recommendations
Plan
Follow - up
Why you are talking about it.
What is the business context?
Where do we stand?
Where we need to be?
Where we want to be?
What is the specific change you want
to accomplish now?
-What is the root cause(s) of the
problem?
-What requirements, constraints and
alternatives need to be considered?
What is your proposed
countermeasure(s)?
What activities will be required for
implementation and who will be
responsible for what and when?
How we will know if the actions have
the impact needed? What remaining
issues can be anticipated?
Verble/Shook
JOHN SHOOK
Standardized Work Chart
Standardized
Work Chart
From: Pick up bar
To: Set RP in press
Analysis
Number
1 / 3
5-15-95
AX
Leader:
Coach:
Takt Time
Std. In-Proc
Inventory
Cycle Time
In-Process
Inventory
Quality
Checkpoint
Safety
Precaution
56 3 54
+
SPOT
WELDER
PUNCH
PRESS
+
2 1
3
ROBOTIC
WELDER
1/10
[Quality check
Every 10 pieces]
+
4
5
6
7 8
JOHN SHOOK
Steve Spear Questions to Define Work
How do you know how to do the work?
How do you know you are doing the work correctly?
How do you know when youve encountered a
problem?
What do you do when you have a problem?
JOHN SHOOK
Where Do You Start Either? Both at once?
Change Culture
First
Change System
First
Lean Enterprise Transformation
JOHN SHOOK
Culture?
JOHN SHOOK
Training Within Industry
Millions of Americans
trained over four year period.
This training is forgotten in
the US.
It formed the basis of Toyotas
core training. Toyota still uses
much of it to this day!
TWI - The training program instituted to support the U.S. war
production effort from 1941 1945
JOHN SHOOK
Involvement Involvement
People Systems
for the Lean Enterprise
Human Human
Resources Resources
Management Management
Work Systems Work Systems
Programs Programs
Suggestion Programs
Employees as Citizens
Standardized Work/Kaizen
Responsibility pushed down
QC Circles
Employee Development
Rewards and Recognition
Examples
Empowerment Programs
JIT/JIDOKA
Respect for People
JOHN SHOOK
It
It

s easier to act
s easier to act
your way to a new
your way to a new
way of thinking
way of thinking
than to think your
than to think your
way to a new way
way to a new way
of acting.
of acting.
Lean Enterprise Transformation
JOHN SHOOK
President Cho of Toyota:
Three Keys to
Lean Leadership
Go See.
Sr. Mgmt. must spend time on the plant floor.
Ask Why.
Use the Why? technique daily.
Show Respect.
Respect your people.
JOHN SHOOK
Mr. Cho keys to success:
Consistent leadership to
focus on people and establish the system
Many good companies try to practice kaizen
and use various TPS tools. But what is important
is having all the elements together as a system.
It must be practiced every day in a very
consistent manner - not in spurts - in concrete
way on the shop floor.
-Fujio Cho, President, Toyota Motor Corporation
JOHN SHOOK
The Toyota Way
The Toyota Way
Continuous
Continuous
Improvement
Improvement
Respect
Respect
for
for
People
People
Best Quality Best Quality - - Lowest Cost Lowest Cost - - Shortest Lead Time Shortest Lead Time
Best Safety Best Safety - - Highest Morale Highest Morale
PDCA Learning Cycles
PDCA Learning Cycles
Getting people
to think and
take initiative
is the key!
JOHN SHOOK
Mr. Cho:
Know normal from
abnormal
- right now
J J
I I
D D
O O
K K
A A




Best Quality Best Quality - - Lowest Cost Lowest Cost - - Shortest Lead Time Shortest Lead Time

Operational Stability and Kaizen Operational Stability and Kaizen

J J
I I
T T

JOHN SHOOK
Where do you start?
Information
Management
Sales &
Marketing
Acct &
Finance
Support
Processes
Manufacturing
Process
Engineering
Production
Control
Human
Resources
Product
Engineering
Purchasing
JOHN SHOOK
One example process
Phase One: Copy TPS in manufacturing
Phase Two: Adapt TPS to your own needs
and culture
Phase Three: Expand to the enterprise
Where do you start? How do you proceed?
JOHN SHOOK
COPY
ASSIMILATE
INNOVATE
Sonny Rollins
JOHN SHOOK
Grasp the Real Condition
Mr. Cho keys to success:
Spend time observing operations
Schedule shop floor time
Discover the team members real concerns
Check how quickly you grasp the real condition
Focus on hourly employee problems
Hard or difficult work
Recurring equipment breakdowns
Tools to increase the value of your shop floor time
Standardized Work
Plan vs actual Board
JOHN SHOOK
NOS Plan Vs. Actual Board
Takt Time: Std. #Operators: Date:
Line #: Shift: Day shift Model: Prepared by:
Production D/T Reason Countermeasure
Time Target Actual Diff. Reject Rework (Downtime)
7:30
~8:30
8:30
~9:30
9:30
~10:30
10:30
~11:30
11:30
~12:30
12:30
~1:30
1:30
~2:30
2:30
~3:30
3:30
~4:30
Pair/operator/hour
Output Defects
Lunch time
JOHN SHOOK
Capacity
Parts/day
0
100%
Demand
800
960
Rate of
Operation
800
83% 83%
Losses
Defects Equip No Chang
Matl over
(Should be zero) (As many as
possible in as
little time as
possible)
Actual
Output
Operational
Availability
550
69% 69%
-100 100 - -50 50 - -50 50 - -50 50
(700) (650) (600) (550) (700) (650) (600) (550)
Who has ownership?
Rate of Operation Vs. Operational Availability
Responsibility
Top Management
Or
Marketing Management
Production
Management
JOHN SHOOK
Causes
Defects
100% 100%
Operational Losses:
Pareto of Causes
Supplied Operator Machine Tooling Other
Material Error Variability
100%
40 30 15 10 5 40 30 15 10 5
JOHN SHOOK
Defects Equip No Change
Matl over
(Should be zero) (As many as
possible in as
little time as
possible)
- -100 100 - -50 50 - -50 50 - -50 50
(700) (650) (600) (550) (700) (650) (600) (550)
Operational Losses
JOHN SHOOK
Chuck Ward
Shop Floor Timeline Example