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A Story of Today's Lean Leader
Bryan Lundon 4 April 2013
Transcript of A Story of Today's Lean Leader
let's see what is on his mind... Bob delegates his responsibility... Gurus to the Rescue! Bob is a small business owner. His ninety person team has been in business for 16 years. He got his start making small medical device components and soon found himself with some unique design opportunities that his main competitor wouldn’t quote. After an early innovative success, Bob soon found himself swamped with orders due to his team’s responsiveness, innovative solutions and do-anything attitude to satisfy his customers. Generally speaking, Bob’s business has been a great success and was even named “Best Place to Work” by his local chamber of commerce in the early years. Bob gets Lean religion He makes the leap of faith! The first of many... The Lean emperor isn't wearing any cloths! Bob checks his mirror and reflects... However, recent years have proven more difficult than those of the past. His team struggles to match past performance. Costs have increased: materials, benefits, utilities and compliance costs all contribute to shrinking profits. This has limited his ability to invest in equipment that would allow him to maintain or gain market share, something new and old competitors are taking away from him with their new and innovative products. But to top it all off, last month, the team missed a promise date. This was the first time in 2 years that they had missed a date. The customer didn’t really put up too much of a complaint, but for Bob, it was the principle of the matter. He never misses a promise date and that has been a source of pride for Bob over the years, despite the many other challenges his team has faced. He was angry and confused, but above all he wanted to do something to change the situation. He wasn't one to give up, he looked to the future. His management team struggled to keep up with the needs of a growing workforce. Now, they face pay inequities in the same positions, inconsistent skills and pockets of low morale. Absenteeism and turnover are not bad, but they are moving in the wrong direction. Quality has always been the team’s strong suit, thankfully some of the catastrophes found in the process have not made it to the customer. At least his management team is on top of the daily fires and keeping them from spreading. Why doesn't this feel like its going anywhere? What choices do we face from here? Is the Leadership journey over? Or just beginning? "If the person hasn't learned, the teacher hasn't taught!" Bob had heard about a state training program through one of his networks. The training was aimed at small businesses looking to turnaround their performance using what was called “Lean” techniques. He called the agency and found that many companies in the area had been trained and were using “Lean” techniques today. After talking to one of his trusted contacts about the experience, Bob decided that he would sign up for the training grant and bring the agency contact in for the training and workshop. He was excited about this and posted a quick notice in the company newsletter. The consultant that the agency subcontracted the work to called Bob ahead of time and asked him about his experience with Lean techniques, to which Bob replied, “I have no experience.” The consultant asked Bob to read up on the topic and provided some book titles. Bob had the books delivered to his office two days later. Here is what he learned from those books: Lean is a journey, not a destination. It will take many years for the lean transformation to occur and you should not expect financial results immediately.
Lean is about the elimination of waste. All non-value added activities are to be eliminated. Some non-value added activities are required though.
There are seven wastes in Lean. They are: waiting, overprocessing, rework, motion, overproduction, transportation, defects.
There are specific tools used in Lean that are aimed at eliminating those wastes. Some examples of those tools are 5S, SMED, Single Piece Flow, Jidoka, Heijunka, Kaizen and Poke yoke.
The greatest waste in Lean is the waste of people’s ideas. After plowing through his weekend reading, Bob had two basic thoughts about this new Lean world he was about to enter and how it related to his company:
First, he understood that Lean was a journey, and he could see the destination. It looked like this to Bob in his mind:
Out on the horizon, Bob could see better quality, on-time delivery, happy employees and lower costs. Bob could also see his management team using the tools he had read about in order to make the company better. Bob became very excited about how these tools would actually help his team deliver the results he desperately wanted and needed.
The second thought Bob had was this: he was happy that he hired a consultant because he had no idea how this would actually work. The day of the Kaizen event was here. Bob painstakingly planned the event through his production engineer. The team had been selected very carefully with input from the consultant:
“We need a cross functional team from the target area. First make sure you have an experienced person on the team. This will ensure we get all of that tribal knowledge out of their head and onto the standard work. I mean, what if they got hit by a bus tomorrow? You don’t want to lose all of that knowledge do you?”
Bob made sure that Lydia, his first ever hire, was on the team. Lydia knew everything there was to know about molding...almost to a fault. She made sure everybody knew it and that made it difficult to work with Lydia on occasion. Bob secretly hoped that putting her on the team would help her see that there are other points of view as well. “Also, make sure you get the greenest person on the team to attend. You never know what these new people see that the veterans are blind to.”
Bob didn’t know the guy’s name; he thought it was Matt, or Mark. The supervisor told him that Matt/Mark was a fast learner and he had some great ideas that the Kaizen team should consider. Bob was betting Matt/Mark would be a big contributor. “Don’t forget, you want an outsider from the team to join. This guarantees that you get another set of eyes on the process.”
Bob selected his junior engineer, John, for this job. John was turning out to be more like a great technician than he was an engineer. Part of John’s problem was that he didn’t always listen to the people on the shop floor. Bob had read in one of his Lean books that Kaizen events will help people listen to each other, work on ideas together and become a stronger team. He thought John could get a boost out of this kaizen event; maybe the team’s success will motivate him to work more closely with others. Bob had given the consultant a heads up about bringing John into the team: he would be difficult to get on track, but once he get’s there John will contribute to the team’s success. “Make sure you pull in some people from the off shifts as well. We don’t want them to feel like we have forgotten about them.”
Bob arranged for coverage through his supervisors, so that Chris and Ben, the molding leads from 2nd and 3rd shifts could attend as well.
The gurus also walked Bob through the project charter:
“We need to pick an area that will give us a big win. The reason you do this is to gain momentum and buy-in. Once you choose the area, think about your goal for the team. Make it big and audacious! May I suggest a few choices? I haven’t seen your operation, but based on what you describe - let’s start with cutting inventory in half and reducing setup time to under 10 minutes.”
After some discussion, Bob agreed with the suggestions. He wasn’t completely sure why, but the consultant assured him that these goals will drive waste out the system, improve deliveries, improve cash flow and improve safety and quality. Bob wrote the charter and sent it out to the team the day before the consultant arrived. He would have liked to brought the charter to the team sooner, but the consultant emphasized against biasing people prior to the event. Now the consultant was here and he felt like his team was completely unprepared. The funny thing was, he didn’t know why he was o.k. with that feeling. Day One of the event was tough but very informative. The consultant took the team through about six hours of powerpoint slides, discussing topics about Henry Ford’s flow principles, the seven wastes, 5S, kanban and SMED (single minute exchange of dies). Bob could see it coming together now, but he could see his team was lost. They just didn’t share the same vision that Bob did at this moment. Day Two was more difficult. The consultant armed the team with clipboards, worksheets, stopwatches, easel pads, markers and fluorescent vests. Bob was a little wary about how this would go over on the floor, but he trusted the process. The consultant instructed the team in how to approach their peers on the shop floor as they went out to conduct time studies, make suggestions and write down actions on the easel board. At the end of the day, the team was whipped. The consultant assured the team that Day Two was always tough, and that they would start to see results beginning tomorrow. Day Three was better, but confusing. The team removed half of the inventory from the floor and put red tags on them as part of the new 5S program they had learned on Monday. They marked squares on the floor for the existing inventory locations. New work instructions were posted so mechanics could change tools in half the time they were before. Many improvements were made on Day Three which lifted the spirits of the hard working team. Bob could see them coming together and getting the tasks done. Day Four was trial day. There were some successes and some setbacks. The die changes were not quite at the target time, but they were much better than before. The kanban system put in place was confusing for people. Bob had to admit that it was a little confusing to him as well. The planners work orders were conflicting with the kanban orders on the floor and the planner couldn’t make sense of what the purpose of the kanban really was. After all, she had steadily reduced the WIP inventory already by 10% because of the ongoing cash flow problems, she could think of other areas where we could see larger reductions with less pain and effort. Things got a little heated between the planner and the consultant, so Bob had to step in and diffuse the situation. Day Five was the Day of Celebration. The team put together a report on poster board and presented the week’s activities to Bob and his Sr. Mgt staff. He was very proud of the team, and after all of the hard work they put in that week, they were determined to make it work. They requested that the supervisors take some time to ask questions of the participants and ensure that the off shifts don’t let the gains made slip backwards. The team had a celebratory lunch and received T-shirts emblazoned with “Team Lean!” on the back. The results of the kaizen event were received with mixed emotions. Bob was happy to see his cash flow improve slightly, although the following month things went back to the way they were. When Bob talked to the controller about this matter, he got a long winded explanation of how labor absorption variances were unfavorable after the kaizen event. The controller worked with Bob’s manufacturing manager to bring variances back in line by building some stock to absorb the overhead costs of doing business. Bob understood this, but something in the back of his mind told him that their was a conflict with how this Lean methodology affected his profitability. The participants in the kaizen event were conflicted as well. On the one hand, they were thrilled to have been part of such a groundbreaking step in the right direction for the company. On the other hand, they were frustrated with the lack of support from their supervisor. To add fuel to the fire, the 3rd shift supervisor had given up on the changes; he claimed that he had no maintenance support on the off shifts to deal with problems they faced with the new die change procedures. So they went back to the old way of doing things. Nobody will notice... First come the workarounds... Can I ignore
this? At first, Bob was encouraged by his day shift supervisor, Keith. He thought that Keith might just bring the enthusiasm needed to make this work. Keith was enthusiastic about Lean since he had done it at his previous job. Keith worked over his shift to learn from his team about the changes and embraced them with zeal. He did his best to work with the other supervisors to get them aligned with the changes, but he felt that they thought he was trying to one-up them so he gave up on trying to convert them. Then came the Double Down... Bob could definitely see problems with sustaining the gains made after the kaizen event. He was convinced that this was normal and with some follow-up work, maybe the team would start to come around. It was also clear to him that he didn’t have all of the necessary players in the room in the last kaizen event, he would fix that on the next round. Bob fixed his efforts on making this Lean thing work. “O.k., the next step is to put Standard Work in place. Let me explain to you what that is about.” Bob listened patiently, taking detailed notes. Here is what he learned about Standardized Work:
Standard work has three components, work sequence, takt time and standard WIP.
Work sequence is the order of the tasks to do the work,
Takt time is the pace of customer demand,
Standard WIP is the amount of inventory to place in the process.
He wasn't really sure what these things meant, but Bob could sense some small storms on the horizon around labor absorption. He also wondered how the team would accept having somebody timing their work and rearranging the workplace. Regardless, Bob was convinced that these measures were needed in order to help his team move the ball down the field. He scheduled the next Kaizen event after carefully selecting his second team. “In order to sustain these gains, you need to have Leader Standard Work. This means managers audit the results of the kaizen event and assure that people are adhering to standard work.”
Bob listened carefully about what leader standard work consisted of. Here is what he learned about that tool:
Leader Standard Work cascades from one leader to the next,
It allows leaders to audit the results of Lean and Six Sigma Kaizen events,
It allows leaders to bring accountability to their lean initiatives.
Bob wondered how this would work, but he trusted the process. Afterall, the first kaizen event had helped bring awareness to the problems his company was facing. People were working harder and for the first time in a few weeks, Bob was feeling really good about the team’s ability to meet delivery goals, they hadn’t been even close to being in danger of missing a promise date. The second kaizen event went very much like the first: five, long days of intense measurement, brainstorming, and implementation of ideas. The new members of the team were coming up to speed, the veteran kaizen team members had to slow down a bit for their new team members. The consultant provided lots of templates and forms for the team to fill out. When it came to the Standard Work forms, the team struggled. They didn’t understand what takt time was and couldn’t grasp how to apply that concept in their build-to-order environment. They also struggled with creating a workcell, especially with their batch and lot control policy. Bob could see they were stalling, so during a break on Day Two, he discussed the issue with the consultant:
Look, I’ll guide them through creating the workcell and forms. This will get them started and then you and the supervisors can follow up and improve it after the kaizen event. You can use your leader standard work forms to audit the new process.”
Bob acquiesced, he did not know how to proceed but trusted the consultant. What he was saying made sense and the approach followed a logical sequence: 1) Plan out a solution, 2) Implement your ideas, 3) Audit results, 4) Improve the situation. Bob was getting the confidence that he could support this, he knew what it was the guru wanted to do, he just wasn't sure how. Now all his chips were on the table. Bob was losing his patience. The teams were in danger of missing this Friday’s promise date. He had just learned that the only way they made last week’s deliveries was by implementing mandatory overtime. To make matters worse, there was a problem on the plating machine that caused an entire batch of cathodes to be scrapped. It seemed that nothing had changed.
He adjourned the supervisor meeting and went out to the shop floor. Lydia was there sorting through the last batch of cathodes, salvaging anything that could be used in meeting this week’s promise date. It was 6:15 p.m. and she looked as broken as some of the equipment surrounding her. Bob helped Lydia sort through the last two boxes of cathodes. As they talked here is what he learned:
The workcell caused more problems than it solved - bins were in the way, people were crossing each others path, parts were getting mixed up, and ongoing equipment problems were slowing the team down.
Supervisors were auditing the team for adherence to work, but nothing was being done about the problems that were preventing them from meeting their goals. The feeling the team had was that the overwhelming pressure to deliver on the promise dates was overriding the need to stop and fix problems.
People were getting tired, frustrated and worse they felt like the situation now was more unsafe for people than ever.
Bob pledged to Lydia that he would double his efforts to fix this situation. He left the shop floor and went to the phone. As he made his way to his office, Lydia’s skeptical look was lodged in his mind’s eye. “Well, of course. There are legacy problems that your lean efforts have now uncovered. You have lowered the inventory water line and revealed the rocks in the river. Those rocks represent impediments to single piece flow, which is the ideal Lean state. You need to remove those rocks in the stream in order for the lean tools to take effect. If equipment is down, you need to increase uptime in order for the workcell to operate at high efficiency. If the workplace is unorganized you need to use 5S to clean it up and keep it tidy. All of this of course, can be built into the operator and leader standard work so that it can be audited and sustained.”
Bob’s mind was reeling. How many more programs did he have to implement in order for this to stick? It all made sense on the surface, but how to choreograph all of this activity? He asked the consultant how to proceed. Here is what he learned: The House of Lean is made up of pillars: respect for people and jidoka. Respect for People means precisely what is says, Jidoka means creating machines with a “human touch”, there are many other tools that support the pillars in the House of Lean,
The best way to organize and manage your Lean initiative is to create a Kaizen Promotion Office within your organization. KPOs do the following tasks:
Lead kaizen events,
Follow up on action task lists,
Bob wasn’t about to give up so easily. Once more, he doubled down on the Lean wager. This time, it had to work! For the next twelve months, Bob sponsored six targeted kaizen events. The focus of the events were diverse: Total Productive Maintenance, 5S, Six Sigma, Heijunka, Jidoka and Poke Yoke and Visual Controls. Often, the consultant would pull many of these tools out of his bag of tricks so the team could make some big gains during the week. Bob was pleased with the progress his team was making. Others were taking notice as well. The external auditors were impressed by the cleanliness of the pilot workcell. A large whiteboard on wheels was in the middle of the pilot area. There were tons of metrics posted on the board: SPC charts, safety incident rates, productivity goals, lean participation rates, labor absorption and on-time delivery performance to name a few. This grabbed the attention of potential customers who walked through the plant. Bob liked to believe that this impression left on his customers pushed his company to the top of the selection pile in some very competitive bids. For Bob, that competitive edge alone was worth all of the effort being put into this Lean thing. The training grant dollars were coming to an end, and so too, Bob’s contract for services with the consultant. The consultant had spent many hours conducting kaizen events and coaching the KPO team. The KPO team consisted of three people: a production engineer, an HR generalist and Lydia. Lydia was promoted into this position based on her loyalty to the company, her experience in building products and her apparent enthusiasm for Lean. The KPO team had conducted several mini-kaizens in addition to the six formally sponsored events run by the consultant. These mini-kaizens were schedule for 1-3 days and usually resulted in a 30/60/90 day activity lists that were posted on the whiteboards in the pilot areas. The KPO team was responsible for helping the teams get those tasks completed. The KPO office would set Lean goals, report results, run errands, make signs, purchase 5S supplies, coordinate work orders with mechanics and electricians and sometimes bargain for time and shift coverage with supervisors so people could stay overtime and get their actions completed. It wasn’t perfect, but after sitting through every single kaizen report out in the past 18 months, Bob felt like things were finally starting to stick. The Lean gurus weren’t kidding, thought Bob. This has been quite the journey! It was the slow time of the year where many of his customers had spent their remaining annual capital and were waiting for the new year’s budget approval to spend. Bob normally took some time off during this part of the year, usually somewhere far away in the islands. He had a couple of days prior to his departure and thought he would motivate the KPO office to take advantage of the downtime and get some projects done. He stopped by the assembly pilot workcell where Lydia was working with the supervisor. As he approached he noticed something was wrong. The supervisor, Keith, was going up one side of Lydia and down the other. Lydia seemed distressed and on the defensive, but then seemed to be on the attack. Bob stepped into the situation and tried to sort things out. Here is what he learned:
Lydia was reporting the 5S audit results to Keith, the day shift supervisor. Keith was upset about the results and had a few complaints about the whole situation:
The audits were supposed to be objective, but they often weren’t perceived that way depending on the auditor and their experience with the team,
The actions resulting from the audits were often a point of contention. The auditors would make suggestions but nobody in the work cell team either agreed with the finding itself, let alone what the solution would be.
The actual 5S activities felt like they were not making a difference to the team’s performance. Their scores were high, but quality or ontime delivery didn’t seem to be affected by this.
Keith was arguing that the biggest problem his team faced was equipment reliability. But since the maintenance and production teams were measured on their 5S and reliability scores, the priority on what to work on first was causing problems, delays and further quality problems. He blamed the KPO office for interfering with his team’s performance Keith was lamenting that his people couldn’t keep doing all of the KPO assignments. Lydia unloaded her list of complaints as well:
The audits were supposed to be helping, but nobody took the time to ask questions and understand what the auditors were observing and noting.
Lydia was tired of trying to pull everybody together to see the problems. Her contention was that since nobody reported to her in the workcell, she had no authority to get the work done. This resulted in uncompleted actions. This compounded the problem that her team was on the hook for audit schedule adherence, so if tasks were not done from the previous audit, she felt bad that she was piling more work on the team.
As a result, she and others were working overtime to get the actions done.
Finally, she expressed her frustration that nobody “gets it” out on the floor and that’s the real reason why nothing is getting done on time. She blamed Keith for not encouraging his team to participate, if they did, the actions would get completed and they wouldn’t feel overwhelmed. Bob was confused. He could see that ontime delivery was better, costs were down, quality was holding strong. What is the problem here, he thought? Why can’t they work together and set their differences aside for the good of the team?
In the end, Bob sat down with Keith and Lydia and began to understand what was underlying their frustration. Yes, they were making some progress, but in the end, a few people can only do so much work in a day. As the team was spread out beyond the pilot areas, they found that the progress in the pilot areas was backsliding and the results in new areas were anemic. Lydia and Keith both agreed that they couldn’t see how they would continue to get the big results they were once used to in the beginning of their lean journey if the responsibility was only left to a few people. That formula wasn’t working anymore and, in fact, sometimes it felt like they were creating more problems than they were solving. They had no idea how to fix this issue. Bob was reluctant, but he called the guru. They talked about the problem. The guru informed Bob about implementing a lean culture management program in his company. The more Bob listened, the more he realized that he was being sold the same bill of goods that he has been using for the past 18 months. Form a team, show them some techniques, make a splash out on the shop floor, follow up and audit. Bob stopped listening after 10 minutes and started to reflect on the impact this Lean Journey has had on his team over the past 18 months. Here is what he concluded:
Most, not all, of the results realized initially have been backsliding or lost altogether,
He has been relying on three people, with little direct accountability or responsibility for teams, to change the culture of a 16 year old company.
He was expecting the people who were responsible for getting teams’ results were not as skilled, had the knowledge or the buy-in that his KPO office had.
Most of the people in the building have heard about Lean, but haven’t really experienced the satisfaction of making a breakthrough improvement.
Bob interrupted the consultant, “My flight is about to depart, I have to leave you now. Goodbye The sun energized him. The sea breeze countered with a soothing wave of coolness. Bob basked in the glory of it all. He loved this place. His life’s work had led him to this point. For thirty years, he imagined this being a tradition. Now, this was his twelfth year of total relaxation on this beach, enjoying the one indulgent reward he allows himself annually. The local resort staff expected him to arrive the same time every year, like a long lost uncle coming home. Bob was incredulous and almost downright angry, his embarrassment long forgotten; now his pride was digging in its heels. He spent fifty thousand dollars matching that state training grant! He promoted productive people into non-productive roles! He sat through every single kaizen report-out, biting his tongue, trusting that painting lines on the floor and color coding forms would eventually pay off in the long run. He kept encouraging people through it all, when the numbers went in the right direction and also when they went south. He believed that his team could do it, even when they didn’t know how! How can this complete stranger say that he hasn’t taught them anything after all that he has done?
“Believing in your team is one thing...knowing that they can do it is another. You can’t truly believe in your team unless you know they are prepared. Anything otherwise is insincere. Is your team prepared, Bob? Is your team capable? Regarding your consultant, is he the coach of your championship team? Or is he something else? What exactly is he? Has he prepared your team? Do you understand what his role should be, but cannot be today because of your current paradigm? I understand, Bob, that you may be resenting this criticism. Once upon a time, I was in your chair and felt the same way. Many others have been there as well, but I was lucky. I had a coach that helped me learn to see what needed to be done, not what everybody else was doing. I am one of the few that is brave enough to say that the Lean Emperor have no clothes.” A man sat down at the bar next to him. A bit close for Bob’s preference, given that there were a half dozen other empty stools at the bar. The man immediately struck up a conversation with Bob which he, after a few moments, welcomed and kicked himself for being anti-social.
The topic eventually came around to work and Bob found himself venting a little bit about his current situation; how the lean effort was stalled, how he had found out before he left that things weren’t what they seemed to be.
The man listened patiently, a look of complete understanding on his face. Bob was embarrassed, he knew he shouldn’t have said so much about his personal situation. It was too late, the damage already done. Bob wanted some reassurance that he wasn’t crazy
“Bob, you are the head of the company, correct? If you were the head of a baseball team, would you show up to the games? Would you show up to the practice? What is your role in the practice? The game?
Bob, doesn’t the key to your team’s success lie in the ability of your team and you as a coach? If your team isn’t capable, what do they need to be capable in? Who will help them? Let me help you help yourself, Bob, and listen to what I say next very carefully: if they haven’t learned, then you haven’t taught.” Bob stopped waiting to talk, to defend his position, his pride and his team that needed no defending. He chose to stop and start to listen. And what he learned from his counterpart was a series of curious facts:
All organizations have present and future goals that are unmet because of present problems and potential problems.
Teams are made up of unique individuals. No two teams are alike.
Only people can solve the organization’s problems.
At any given point in time, a level of uncertainty surrounds the capability of individuals to tackle specific problems.
Increasing the problem solving capability of individuals will increase the probability of your team’s chances of success in tackling the organization’s problems.
In any given organization, leaders are in the best position to develop the problem solving capabilities of the individuals.
The problems of the organization are often created and thereby owned, by the leaders of the organization.