Leading the Change

Can We Avoid Politics in Lean Transformation?

Changing to lean is a political process. There, we said it. Everyone knows politics are bad, right? Politics is what happens in organizations that are not being run rationally. A good, healthy organization is one in which reason rules and everyone is aligned toward a common goal. We have described Toyota as a utopian environment where everyone shares common goals, which start with the customer. So if you want to learn from Toyota, you should start with the assumption that everyone is working toward the same goals, right?

Wrong! Wrong! Wrong! Or as a harsh Japanese sensei exclaimed: “Stupid! Stupid! Stupid!” (As a young, petite woman translated from Japanese to English, to the horror of an American).

What do we mean by a political process? We mean that in any real-life organization, even Toyota, there are different people with different interests and agendas. Those who are passionate about any change in the organization have a vision. This vision will be embraced by those who see it as supporting their interests and opposed by those who do not. The degree of support and opposition will vary depending on a number of factors, such as how strongly it supports or violates interests, how strongly the interests are held, and the degree to which the organizational culture supports alignment around common goals. The political process is how these different interests work themselves out over time. Those leading the change would like to simply have everything fall into place like moving pieces on a chessboard. In reality there are always compromises to navigate through the murky waters of other people’s interests. Push too hard, violate too many interests, and you will create a block of organized resistance that can stop the change process in its tracks.

Politics is about power, and power is the ability to get things done even against the will of others. Think of different people as having different pots of power: Once the pot is empty, you’re done. That’s a gross simplification, but power does need to be used sparingly. A wise leader knows when to give in, when to attempt to persuade, when to call in a favor, and when to use the formal hierarchy of authority to get official orders. Some leaders intuitively know how to use power, and others bobble it continually.

Leadership is about power. A leader needs to lead and is only a leader with followers. Getting people to follow you in a direction they are going anyway is not being a leader. The challenge is to get people to follow in a direction they might not otherwise go. Leaders must have a sense of direction. We sometimes call that a vision. Then they must share the vision and get others to buy into it and actively help achieve it. If they do this, especially when followers would not have done it on their own anyway, this is the definition of power.

There are a number of sources of power as described in the classic typology by the father of sociology, Max Weber1:

1. Rational-legal. This is formal You are the boss in the formal hierarchy and can order things to happen, and others are supposed to obey. You have the legal right to give the orders. Your position confers the right onto you. This is often thought of as bureaucratic power.
2. You can threaten negative consequences of failure to comply.
3. You control some type of reward and offer it contingent upon being followed. This could be a tangible reward like money or an intangible reward like praise. This was not included in Weber’s original typology but it is the flip side of coercive power—instead of a threat, it is a promise that certain behavior or results will yield a certain reward.
4. When you have charisma, people simply want to follow you. There is some sort of animal magnetism that exudes a force that moves people to do as you request.
5. It is the way things are done. It is part of the cultural heritage that on Sadie Hawkins day the girl asks the boy to dance and he should agree. It is part of preservation of our values and social norms.

A good leader is apt to use all of these sources of power at one time or another. Generally we think of someone as being a leader, rather than merely an administrator, if they have at least some degree of charisma. Any bureaucratic manager can use the first three sources of power. Give them a title and access to formally sanctioned rewards and punishments, and they can get a lot done. But the leader is the person who has a variety of tools available and knows when and how to use them. When should I use my formal position? When should I use the hierarchy to threaten punishment? When should I use my personal charisma to meet with people one-on-one and influence them? When should I make a speech to the team that leaves them crying? When should I preside over a formal ceremony and draw on the power of tradition? Effective leaders learn over time how to use all of these sources of power effectively. Ineffective leaders are like kids with a loaded gun randomly aiming and firing.

We’ve had many opportunities to see large multinational companies implement lean as a corporate approach, companies like Ford, General Motors, Delphi, PPG, Boeing, Northup Grumman, the U.S. Air Force and Navy, United Technologies, and many more. In all cases there’s a clear trend: Some individual manufacturing plants take off with lean and get way ahead of the pack, and many (often most) lag behind and implement lean in ritual and superficial ways. Visit individual plants and check them out. What’s the difference between them? The answer is always leadership. In at least 90 percent of the cases where the lean effort has been successful, there’s a plant manager who believes in lean, has a vision, and knows how to lead. In the remaining 10 percent, another high-level manager in the plant—perhaps the manufacturing or assistant plant manager— has led the charge and the plant manager did not interfere.

Leaders know how to lead, and leading means using power effectively. How do we teach that? There are many debates about what can and cannot be taught in business school. We say leadership cannot be taught in business school. The real question is if it can be taught at all or whether it’s in our gene structure. In any case, companies can do a number of things to foster leadership, including:

• Carefully selecting leaders
• Mentoring potential leaders by effective leaders
• Providing opportunities to challenge people to allow leaders to emerge
• Providing leaders the support and tools to be effective

These are all things that Toyota does extremely well, from the team leader to the group leader to the general manager to the chief engineer, and to the executives of the company. Leaders are carefully groomed and carefully selected. Every leader knows one of his or her most important jobs is to develop people, and among those activities is developing future leaders. Everything about the Toyota Way is designed to challenge people to grow, and in that environment leaders emerge and blossom. And the tools of the Toyota Production System (TPS), the culture of the Toyota Way, and the unified management framework of senior executives, provide a fertile ground for natural leaders to be effective.

Leadership from the Top, Middle, and Bottom

Change is impossible without effective leaders.2 But where in the organization should those leaders be located? The answer is that leaders are needed at the top, middle, and bottom. Let’s go into each of these levels, and then look at what’s involved in becoming a lean teacher, or coach.

The Role of the Top

Behavior in the trenches of the organization is a reflection of the leadership of the top. We saw in Chapter 11 that the leaders at Toyota are hands-on. They’re on the floor or in the engineering offices or wherever the real action is. They have learned the art of genchi genbutsu, understanding how to observe deeply and see what is truly going on. Wherever they go, they are coaching and teaching.

But like all leaders, they too must work through other people. In fact, this is the definition of a leader—they have followers. We would not expect them to do a lot of the detailed design or implementation. So what exactly is their role? Figure 20-1 shows a typical structure for a lean transformation. Each of the roles in the diagram is necessary, with the Executive Sponsor involved in two aspects of the process. On the one hand, he or she provides the resources necessary—resources that include but are not limited to money—and on the other has all the sources of power available to make things happen.

Remember, this is a political process. There is always resistance to change. There are people who will see their interests or the interests of their departments threatened by the change. Let’s consider an example.

At one defense client that repairs aircraft, the labor hours of all repair workers have to be charged to accounts. To get shop floor workers involved in lean projects, they had to be taken off of their normal work and assigned to teams to participate in kaizen events. Implementation was aggressive, so a number of projects were conducted in parallel involving dozens of workers. There was a lot of pressure to get the aircraft out significantly faster to support the needs of the customer. The results of the lean transformation were impressive and moving this facility toward becoming the fastest in the business. The results were potentially worth tens of millions of dollars. But in the meanwhile the workers’ time was charged to a lean account, which was falling further and further into deficit. An executive operating committee for the base was pressuring the head of the plant to stop the lean activities. Under similar circumstances an engine repair facility on that base had stopped lean events. This leader might have succumbed were it not for the captain of the base, who authorized him to continue to use the workforce to run the events. The captain knew it was the right thing to do and was committed to lean.

Sponsor = Executive or manager underwriting the activity of the team. Not member but provides accountability.

Process Owner = leader of the team and is personally invested in seeing the team succeed.

Relationship between Sponsor and Owner is key. Sponsor should be spending time weekly with the Owner coaching, challenging thinking and thoroughness, and providing needed support.

Figure 20-1. Role structure in the change process

It’s interesting that the great “expense” of the project was an artifact of the command and control measurement system itself. All of the workers involved were hourly, but were paid a salary whether they worked on the lean project or on repair of the aircraft. In fact, with the lean activities, productivity was improving and many of the workers were not needed to work on the aircraft. There was no variable cost associated with the operators’ time, but the internal accounting system that forced charging time to the lean account increased the lean account deficit. Since the executive committee managed by these numbers, they were up in arms about overspending on the lean program. They saw costs and not benefits. In reality there were large benefits but no marginal costs associated with workers’ time.

And the workers were learning and strongly supported the lean activities. There will always be ongoing difficulties in making progress on lean: finances, individuals trying to block progress, lack of support from needed functions like engineering and maintenance, individuals citing rules that are being broken, etc. The executive sponsor must be able to see the bigger picture: Lean can fundamentally change the business to a high-performing organization. An effective executive sponsor running interference is the difference between progress and stagnation.

In our experience it’s easy to get executives to see the benefits of lean and even get enthusiastic about it. But the difference between success and failure is the difference between head nodding and verbal support from the top and getting real action from the top. One dictionary defines “commitment” as devotion or dedication to a cause. Lean is a cause. A leader needs a vision of a lean learning enterprise and then the dedication to move toward that vision. Even in the face of opposition, the leader must press ahead and be unwavering in support. If the leader wavers, then subordinates will certainly waver. And if the leader turns every lean step into a cost-benefit analysis of whether it’s worth doing, that will be seen as wavering.

A committed leader must provide the resources to keep things moving. This includes top-notch people to work on lean, financial support, and accountability for delivering results. It must be clear that this is important to the company and participation is not optional. It must be clear that the Process Owner in Figure 20-1 is responsible for success and will be held accountable. This goes both ways. The Process Owner needs to be accountable upward, and the Sponsor, as the diagram shows, must reward and encourage the Process Owner for hard work and results. This suggests that the Sponsor must know what’s going on— not in the bureaucratic sense, but in the Toyota Way sense of genchi genbutsu. The sponsor must go and see to truly understand the status of the improvements.

TIP Schedule Regular Reviews of Progress on the Floor

Unfortunately, top leaders get into a pattern of e-mail, meetings, and travel, and walking the floor to see firsthand lean progress is at the bottom of their priority list. Fujio Cho (quoted in The Toyota Way) describes getting Americans to seriously use the andon system by personally going to the floor every day to encourage them when he was president of Toyota Motor Manufacturing in Kentucky. This is a serious commitment and requires the executives to know enough to understand what they are seeing. There should be a regularly scheduled walk-through of the facility . . . or multiple facilities. There should be visual indicators of progress in the lean projects, and general metrics so it’s clear when walking into the area how the projects are doing. A checklist for the executives, noting what to look for in their go and see walks, would be a good addition, at least at first. And these visits should be seriously scheduled and moved to the top of the list of priorities.

Stuck in the Middle

Pressure from the top, from the bottom, from all sides. Welcome to the life of the middle manager. We’re using the term “middle manager” broadly to include everyone from the first line supervisor to the department heads. Their jobs are to turn the great ideas of the people at the top into concrete action and results. This means they must affect the lives of people at the bottom and work through these people. They must deliver daily production, be accountable for quality and service, and deal with all the “experts” management sends along to “help” them do their jobs better.

To people in the middle, lean is one in a long line of great ideas from management coming to them by way of staff. Middle management has another peculiar characteristic. Despite the formal power of people at the top of the organization, middle managers have the power to either get things done or stonewall. They can be the difference between the success or failure of lean. To a change agent, the middle managers can be less than pleasant. This is not because they are naturally stubborn, resistant folks. It’s because of their position. The buck stops with them.

For a lean change agent, the middle management level poses the most serious challenges. On the one hand, this level provides the most leverage for lean transformation. It is nice to have the support of an executive sponsor, but they’re not going to drive the real action. The middle manager will. In fact, we saw that the group leaders at Toyota drive most of improvement at the operating level. On the other hand, it’s unrealistic to expect many middle managers to come forward and become the leaders of the lean change process in their areas. The team leaders do a lot of that at Toyota, but only after years of mentoring and coaching and creating a particular culture. And it is based on the Toyota system of group and team leaders discussed in Chapter 10.

There are some exceptions. There are particular individuals in different parts of middle management—engineering, quality, and manufacturing—who naturally relate to lean and get excited about it. If they grab it and take off, they can begin to win support upward even if senior management is not initially behind them. Unfortunately, these cases are rare. It must start at the top.

So in most cases lean transformation will rely more heavily on the lean coach using the hierarchy and power of the executive sponsor and working through middle management. Over time, if the company is successful in developing a true lean culture, there will be a flip-flop and the lean coach will be there to support middle management in driving the change.

Finding the “Sociometric Stars” at the Bottom

Organizations are “networks” in social science terms. Individuals are connected to other individuals through communication ties, social ties, and emotional ties. If you draw a picture of these connections, for example, mapping the frequency of communication, it starts to look like a big spiderweb—a network. If you look more carefully, you’ll see that certain parts of the network are denser than other parts. At the center of these dense parts are particular individuals sometimes called “sociometric stars.” That is the academic term for people who are popular or even natural leaders. Some people’s opinions count more than others. If you can win over these opinion leaders, you can change the culture by working through them. These leaders are not difficult to find. Since they’re so well-connected, you can find them in many different ways. Those in the organization generally know who they are, as do their bosses in middle management. These are the people Toyota tends to find and make team leaders.

There are many ways to involve them. The lean coach can seek them out and informally talk to them. But a better way is to formally involve them in the change process. The kaizen workshop is one great format for involving these natural leaders. If you break the larger group in this kaizen event into smaller subgroups, you might even make these individuals the head of a team. That, of course, means management must pay them to be part of the event, but it’s a trivial investment in the long term, with a large payoff. Some companies will find a few of these people and make them full-time members of the kaizen promotion office. It is one thing for middle managers to come to the floor to enlist the support of the workers, and it’s another for a respected peer to make a case for support. So, find these people and find ways to involve them.

Becoming a Lean Coach

The lean coach is a staff position. It is some person or group inside the company that has been assigned to be the internal expert or experts. In the transition to lean, this role is critical. Unfortunately, everyone is busy, and lean is just one more thing to do. For a full-time lean coach, this is their job, and it usually becomes a passion more than a job.

Lean needs to be driven by the line organization, not a staff organization. The line organization has responsibility and accountability for delivering results. The people doing the value-added work are in the line organization. They need to use all the lean systems, so they should own the lean systems.

Take, for example, standardized work. Going back to Frederick Taylor, the father of time and motion studies, the idea of standardizing how work gets done was thought to be a staff job. Taylor envisioned large staffs of industrial engineers who were expert in “scientific management.” With their scientific management, which people on the floor did not understand, they could determine the one best way to do the job, and the foreman was required to enforce this one best way. The unanticipated result was the conflict this created between labor and management and the antagonism toward the “efficiency experts.”

This led to more waste, and a separation between the goals of management and the goals of the workforce.

We saw that at Toyota standardized work is a tool used by value-added workers and their team and group leaders. It is a tool for continuous improvement. If we create a staff of “lean experts” pushing standardized work onto the workforce, we‘re right back to Taylor’s scientific management.

Having said that, in the transition state to lean, the lean coaches are perhaps second only to top management in their importance to lean. It is the unfortunate reality that the workforce does not know enough about lean or have enough motivation to change to something they do not understand. Senior management may be “committed” but have so many other pressures they cannot focus a great deal of attention every day to driving lean change. Thus, much of the responsibility falls on the lean coach or lean team.

Given these considerations, can lean be a part-time assignment added to someone’s full-time job? Presumably, if five people each spent 20 percent of their time on lean, it would be as good as or better than one person spending 100 percent. But five people with full-time jobs that always seem to expand to 120 percent of their time will not find the 20 percent to devote to lean. It is rare that we see a lot of success with lean without at least one full-time lean coach. In the last chapter we described Denso’s approach to lean. As part of their Efficient Factory program, they’re creating internal lean experts from their manufacturing engineering group. There is a general movement within Toyota, including NUMMI, in North America, to develop stronger TPS experts within the plant—at least two full-time TPS specialists per major process (e.g., paint, body shop, stamping, final assembly). This is a part of the recognition that outside of Japan, where TPS has become part of the culture, there is a greater need for TPS specialists to raise the bar on TPS in the plant.

The job of the lean coach includes:

1. Leading model line programs
2. Leading value stream mapping
3. Leading kaizen events
4. Teaching lean tools and philosophy (short courses and through lean activities)
5. Coaching leaders at all levels
6. Developing the lean operating system (principles, metrics, assessment approaches, standard operating procedures)
7. Internally promoting lean transformation
8. Externally learning and bringing back new ideas

The organizational structure of the lean program in Figure 20-1 that we looked at earlier suggests that the Sponsor, Process Owner, and Value Stream Team are leading the transformation, and certainly that would be ideal. Unfortunately, it’s unrealistic in most cases, particularly early in the life of the lean transformation. It simply does not happen. External energy from outside lean sensei (consultants) is needed to keep teaching, driving, and pushing. On the other hand, when the benefits start to become clear to the line organization, there will be an increasing pull for the services of the internal lean coach: “Please come to my area next.” This is a great sign of progress and makes the job of the lean coach a whole lot more fun.

TRAP: The Microwaved Lean Coach

Since lean tools and concepts are by design straightforward, it seems it should be easy to train a lean coach. Many universities and professional associations will certify your lean coach. But while these programs can teach useful things, they will not produce a qualified lean coach.

There are two kinds of knowledge: procedural knowledge and tacit knowledge. Procedural knowledge can easily be taught in the classroom—the steps to follow to develop a cell, for example. Tacit knowledge is what you learn from experience, guided by a strong coach. Knowing when a cell is appropriate, when the level of stability allows for a one-piece-flow cell, how to sell the concept to management, where the cell fits into the connected value stream, what size and shape cell will work best, and so forth, is based more on tacit knowledge. The “Tale of Two Pistons” case in this chapter illustrates how well-intentioned managers and engineers with a good deal of formal lean training ignored a true TPS expert and made many wrong decisions in setting up a machining cell. The seduction of microwaving a lean coach through immersion in a short training program is overwhelming for some managers. But resist! It takes several experiences implementing a true lean value stream as a team member and then as a leader over several years (see the model line program in Chapter 19) for an individual to begin to have a foundation to become a good lean coach. That experience should be guided by an experienced lean coach with at least 5 to 10 years of serious lean experience.

Since the lean coach is so critical to the process, he or she needs to be carefully selected. Lean coaches must have the following characteristics:

1. Smart
2. Quick studies
3. Love to learn
4. Hands-on
5. Passionate about improving processes
6. Leadership skills
7. Strong interpersonal skills
8. Excellent communicators (writing, speaking)
9. Basic technical skills (comfortable with spreadsheets, graphs, data, etc.)
10. Systems thinkers (able to understand process flows, etc.)
11. Natural problem-solving skills
12. Read books
13. Open to new ideas
14. Personally organized

These are raw skills and attributes you should be looking for. But someone with these characteristics is not automatically a lean coach. The lean coach also needs to be trained. Some of this is technical training in lean tools. Reading books and perhaps taking a lean course at a university can do a lot in this regard. But the deeper training that makes a difference is on-the-job training, and it can only be done by someone who already is a strong lean coach. It is a mentoring process. This is the role of a lean sensei.

Learning from the Lean Sensei

In Japan any teacher is a “sensei.” But the term connotes more than this. It connotes a relationship. The sensei is deeply respected for having knowledge and wisdom. The student wants to learn from the sensei. The sensei has walked the path before and the student is starting down the path.

Some companies are fortunate to have internal sensei, who can coach and teach. It could be someone they bring in who has been mentored in another company or a manager they hire. Some plant managers or vice presidents are former Toyota managers, for instance, and they become natural internal sensei. But more often these sensei are outside consultants who have learned through deep experiences, perhaps working for Toyota.

The most important thing about the sensei is that they are teachers. They are not the ones to come in and do it for you. Teachers are only as good as their students. Thus, picking the right internal lean coaches to learn from the sensei will determine whether you get leverage from the sensei.

There are different styles among sensei. Ohno’s original approach was harsh instruction, an approach in which the sensei psychologically, and sometimes even physically, beats up the student. The sensei’s job is to find fault, criticize, and ridicule the student, who learns that he or she is inferior and has to work hard to become adequate. Some hired sensei—experienced lean consultants— find they need to be kinder and gentler and go too far. They know if they are overly critical they may lose the job. So they become a member of the group and do a lot of the work themselves.

In most situations, the approach of the lean sensei should be somewhere in between harsh and soft. The lean sensei cannot become a pair of hands doing the work. They must challenge those they are training. This often means giving challenging assignments and stepping back, allowing the students to struggle and even fail. They can then step in and coach. This is the learning by doing approach. The student must be doing, and feel personally challenged, in order to learn. They will not learn nearly as much by watching the sensei.

There are different models for the frequency of visits by the sensei. It can range from full-time to leading a kaizen workshop every other week to a couple of days per month. Full-time is usually too much, and two days per month is usually a minimum.

Typically, sensei who are there full-time are doing, not coaching. This may be necessary if there are no strong students assigned full-time to the program. It also may be necessary to move fast. But it is only useful as a transition strategy. If the full-time sensei can drive enough change to demonstrate what lean can do, it will hopefully motivate management to assign a strong full-time person to work with the lean sensei. Then the sensei can reduce involvement.

The every other week workshop approach can drive a lot of change quickly (see the Tenneco case in Chapter 19). If the sensei is truly leading a kaizen workshop every time he or she comes, they are probably not doing much coaching other than on-the-job teaching through the workshops. And there is a strong value to coaching beyond the workshops.

The two-day-per-month approach is very powerful if there’s a strong internal team to coach. The sensei reviews progress since the last meeting and provides challenging feedback and assignments for the next month. The sensei may demonstrate a tool or help with a tough technical issue and then leave. With this model, the sensei cannot do, but must teach, or nothing gets done. The students learn they cannot be dependent on the sensei.

When we put together the elements needed to make lasting change, it looks like Figure 20-2: the structure of the change process in terms of roles and responsibilities, the broad participation and ownership needed (especially within the line organization), as well as accountability, mentorship to learn by doing, and committed, knowledgeable leadership.

The importance of committed leadership cannot be overstated. The “Tale of Two Pistons” case following highlights the importance of committed and knowledgeable leadership. This case seemed to have everything going for it—high-level management support for lean, a good change structure, ownership by the line organization, and even one of the best lean machining experts in the world. It was a new line, so it could be developed lean from scratch. One area under one project engineer learned from the lean sensei, and the line was lean and highly successful. The other was led by a project engineer who did not understand or want to understand and took his lead from a plant manager who did not take the time to try to understand. The predictable result was failure.

Lasting Results

Figure 20-2. Key ingredients for change

Case Study: A Tale of Two Pistons: Toyota Machining Philosophy in an American Firm

“It’s like there’s a delicious glass of beer sitting there, right in front of me,” explained Ishiyaki Yoshina, 30-year Toyota Motor Corporation veteran turned consultant for Engineering Integrators Company (EIC). “Every time I reach for the ice cold beer to take a drink, my hand runs into a transparent wall that has been put there in front of me.” Yoshina-san spoke in the kind of metaphor that often characterizes Toyota associates. His analogy was colored with frustration over Acme Systems lack of progress toward a lean environment in the one and a half years he had been with them.

Introduction

We have emphasized that lean transformation is a political process, one that requires committed, informed leadership. A great example of this was a case David Ostreicher experienced as a student intern working for Acme Systems—one of the world’s largest and most diversified suppliers of automotive components. David was assigned to work with a retired Toyota engineering manager who was a leading expert on TPS applied to machining. Employed, at high daily rates, as a lean expert based on his 30 years at Toyota in production engineering, Yoshina was particularly familiar with plant launches of machining technologies. He had extensive experience with equipment installation throughout Asia during his career with Toyota, but this was his first attempt to apply Toyota methods in the United States. David was excited to further his TPS education by learning from Yoshina, and excited about the company. Acme was committed from the CEO level on down to building a lean enterprise, and had nearly a decade of experience. Yoshina was hired to launch several new product lines in what was to be a showcase for TPS applied to machining.

Two separate machining lines that made different versions of compressors were being installed in the same plant—the A1 and the X10 lines. Each had a different project engineer. As it turned out, the A1 project engineer embraced Yoshina’s advice, following it to the letter with great results, while the other X10 project engineer tried to cut corners for the sake of short-term cost reduction and expediency, with poor results. Interestingly, both had the same ambitious goals and access to the same world-class lean expert.

“First Time Quality” was defined as the percentage of manufactured parts that passed all quality inspections the first time they were tested. The current First Time Quality levels were stagnant at about 85 percent, while the target called for greater than 98 percent. “Operational Availability” referred to the percentage of time equipment was available to produce parts when that equipment was required to produce parts. Machining operations at Acme typically had Operational Availability in the 60 to 70 percent range, and the team was being asked to bring this to over 85 percent. The business returns that were targeted (minimum net income, operating return, and return on net assets) were aggressive but attainable. It was obvious that there were high hopes for this new lean showcase.

The A1 project engineer was responsible for transitioning the older A1 family from an existing plant to the newer plant with completely new equipment. Simultaneously, the X10 project engineer was responsible for coming up with the best X10 line concept possible to be added to the two other X10 modules already operating in the newer plant.

Though the two lines produced pistons for different product families, the process used to create them was similar on paper.

Machine builders had already been selected for both the A1 and X10 lines. For the X10 line, the current plant manager’s preference won out and the same types of machines that were already producing X10 pistons were selected for the sake of consistency. For the A1 line, Yoshina’s recommendation prevailed and Toyoda Machinery Works (TMW), a relatively new player in the U.S. market for machining centers—though an established player in grinders—was selected with the hopes of initiating a long-term and more far-reaching relationship with Acme.

We will discuss some of the detailed technical decisions made by each of the two teams. This is not intended to teach a course in machining, but to illustrate some of the detailed thinking required to develop truly lean production lines.

Yoshina Meets with the A1 Team

Yoshina’s approach was to provide guidance without dictating how to make all the engineering decisions required. He gave general advice and then commented on the ideas of the teams. The A1 team listened carefully to learn all they possibly could, then translated the lean concepts into decisions. One issue was how to make the material flow, given the desire to achieve one-piece flow, while considering the practical constraints they faced. The team decided that instead of one-piece flow, they would machine four pistons at a time. There were two main reasons. First, work would be balanced nicely, since four pistons would be loaded into one machine (two pistons in each of the operator’s hands), a whisker switch would be activated, and then the operator would go to the adjacent machine to pick up the autoejected group of four pistons to place in the next process. Second, based on machining cycle times, four would be the number of pistons required per cycle to ensure that the A1 assembly area was not starved for parts; that is, to achieve the takt time required to make four pistons at a time.

However, with the amount of chips produced if four parts were machined simultaneously, they were not sure how to keep the jigs that TMW was providing with their equipment clean—and without clean jigs for every part, First Time Through Quality levels would be negatively impacted. The team’s current idea, brought to the table by TMW based on their process database, was to machine the pistons horizontally so centrifugal force and gravity would throw the chips away from the parts and jigs. They were not sure if this would work, and looked to Yoshina for some sort of reaction. Upon hearing this, Yoshina nodded in agreement.

The next issue concerned the footprint of the machining line. There was not much room in the proposed A1 area, but the team wanted to follow Yoshina’s recommendation to maintain a straight-line flow. They recalled Yoshina’s comments on the strength of this approach during an earlier meeting:

A plant is like a show window for customers. The way the machines are laid out should make a good impression on visitors. No isolated islands are allowed. The lines and machines should be laid out straight so we can see far ahead along the neat line. The flow from receiving the material to shipping the finished goods should be simple. Only when cycle times are fairly long and the operator has to handle multiple processes and walk around a fair amount should Uor L-shaped cells be introduced to reduce the waste of walk time and distance.

Always be thinking as if you were the part: Where would you want to go next? Would you want to go along a complex route from receiving to shipping, or would you prefer a simple path from supplier to customer?

Maintainability was the last topic brought up. The previous generation of A1 machines was infamous among the maintenance staff for being hard to keep running. Gauges and oil points were located all over the machines, and there was no set schedule for preventive maintenance. Struggling with this culture, the A1 team decided to take the first step and at least make the visual aspects of maintenance accessible to the staff from one place on the machine’s rear side.

Yoshina took a hard look at the material that had been presented to him and seemed pleased. While he did not think that everything would go according to plan without countermeasures for issues that would arise throughout the process, he did reaffirm the team’s fundamental philosophy, which underpinned each decision they had made.

Yoshina Meets with the X10 Team

The X10 team had a different view of Yoshina. It seemed everyone was of the opinion that his presence was a distraction from their more immediate deadlines. They politely listened to his ideas but then went about making decisions using more traditional criteria— mostly short-term cost.

They presented their ideas to Yoshina, beginning by touting the cost savings they were projecting by ordering jigs from a local company instead of the machine builder. The purchasing leader for the X10 product family identified an 8 percent up-front cost savings by using a local jig maker. In addition, the close proximity of the jig maker to the plant would allow for quick replenishment of damaged jigs or changes to existing equipment.

They next described their accomplishment in the area of one-piece flow. The group knew this was the ideal in lean manufacturing, based on an internal Acme workshop they had attended, and believed that Yoshina would therefore approve of their approach. The team was even prouder to report that due to the final machining cut, the initial one piece would become two individual finished pistons downstream in the process. Therefore, the line would enjoy enhanced productivity numbers, since handling one piece upstream meant two pieces of finished product downstream.

They then moved on to discuss the work flow in their cell. Everyone knew that the machine from Vendor 2 was about 66 percent faster than the machine from Vendor 5. Instead of waiting for a challenging question from Yoshina with regard to operator balance, the team anticipated the query and presented a chute concept that would be installed on several of the machines to hold a dozen pieces of work in process. Since the Vendor 2 machine was faster, it would be manually loaded and unloaded by an operator. On the other hand, due to the slower cycle time of Vendor 5, an automatic load/unload option had been purchased for that machine. In this way, it was calculated that the additional time the human operator took to load and unload parts from the Vendor 2 machine would offset its faster cycle time, thus bringing it into rhythm with the Vendor 5 machine. To complete the system, the dozen pieces of work in process would act as a buffer, just in case the automatic load/unload mechanism and the manual load/unload operator got out of sync with one another.

As for how the tool actually hit the metal, the X10 team decided to clamp the piece of metal to be machined in place, then move the tooling up and down above the piece in order to machine it. Coolant would be sprayed over the workpiece, and the plant’s first implementation of standardized work would require operators to remove the chip build-up from the fixtures and tooling every hour.

These decisions enabled the new X10 module to fit into an unusually shaped space on the manufacturing floor, next to the two other X10 cells (Figure 20-3). Achieving this co-location goal was projected to save the material handlers supplying the line over 200 hours annually. The X10 team also reaffirmed the decision of previous X10 teams to keep the two metal-coating processes at an outside vendor, though their quality had taken a turn for the worse. This would increase work in process levels by 15 percent, but they would not have to invest in the $95,000 equipment and associated training.

They concluded the presentation with an update from the quality leader on the team. Due to the projected savings from various decisions throughout the design process, the team was planning to use surplus funds to invest in a data collection package that would monitor each machine’s performance. Data could then be gathered at a PC with software capable of producing reports showing various metrics of interest such as down time, number of pieces produced, and machine cycle time. Collecting this sort of information was extremely important since the quality level of the current two X10 modules were not meeting targets.

With this, the presentation was over. Yoshina did not specifically comment on any of the plans presented. Instead, he approached the table and handed them a suggested layout for the X10 line that he had sketched during the presentation. They were surprised to see that Yoshina did not constrain the line to the oddly shaped space that was available next to the two current modules, but instead had sketched a straight-line layout. They agreed to discuss this proposal with the plant manager. Yoshina then thanked the group for their time and said he looked forward to hearing the layout decision.

Four days later Yoshina received an invitation to meet with the industrial engineer on the project. In the meeting, the engineer reported that after talking with the plant manager, it was decided that the layout would remain as the team had originally suggested. The plant manager did not understand why a layout that would require rearranging the proposed area to accommodate a straight-line flow was suggested. Yoshina realized that if the plant manager had taken a few minutes to go out to the floor, he would have seen the uneven risers, snakelike walk paths, and tight confines that characterized the convoluted layout he was supporting (Figure 20-3).

Upon hearing this news, Yoshina was obviously very disturbed. He could not figure out why Acme was paying his company hundreds of thousands of dollars in consulting fees for recommendations that would only be rejected. He got up from the meeting and stormed off, muttering a barely audible “Yappari”4 under his breath.

Performance Results of Two Machining Lines

Which line performed better? In late 2004 both the A1 and X10 designed piston lines had been installed and were running for approximately two years. Though minimal official data exists for the performance of the A1 and X10 lines for the time they had been

Select A1 Line Characteristics

• 4 pieces in grinder at a time
• 4 pieces WIP at a time
• 1 machine builder
  • Same builder for jigs
• No outside processes
• Gauging line-side
• Straight-line flow with consistent machine heights

Select X10 Line Characteristics

• 1 piece in grinder at a time
• Uneven WIP among machines
• 5 machine builders
  • Multiple jig builders
• Outside coating process
• Gauging 100 yards away
• Confusing line flow with inconsistent machine heights

Figure 20-3. Technical characteristics of A1 vs. X10 Lines

producing parts, interviews with operators, engineers, and managers led to the following overview:

Equipment

The majority of downtime on the A1 line was reported as being caused by material shortages from the in-house process located adjacent to the A1 machining line that performs the previous operations, while the downtime on the X10 line was due to quality and machine breakdowns within the line. These X10 quality issues have since warranted that every finished piston is gauged in an area 100 yards from the machining line before being sent to assembly. Contrary to this, pistons made on the A1 line are gauged in sample lots every 1,000 parts.

After nearly three years’ and hundreds of thousands of dollars in consulting fees, Yoshina’s personal frustration became overwhelming. Despite his best efforts, he felt as though he was adding little value to the transition team and left Acme to return to Japan in mid-2003.

What Can We Learn from the Tale of Two Pistons?

1. Knowledgeable and committed leadership is the key to successful lean transformation. We’re often asked why companies are not busily implementing everything they can learn from Toyota, given the success of the Toyota Is it cultural? Is it resistance to change? This case gets to the crux of the matter. First and foremost it is leadership. This plant had all the ingredients needed for successful change: high level management support, a track record of success with lean, access to all of the lean tools and training materials, a clean sheet to work with, and one of the best experts in the world as a full-time advisor.

The A1 project engineer believed and wanted to learn. The plant manager let him set up the line as he saw fit. We give the plant manager credit for not interfering. But when the X10 project engineer resisted the opportunity to learn and reverted to traditional thinking, the plant manager quickly sided with him in blocking Yoshina’s fresh ideas, exemplified in his approving the convoluted flow to fit into the existing space, instead of stretching to achieve the recommended straight-line flow. It seemed the plant manager had everything to gain by following the advice of this expensive and knowledgeable mentor to create the showcase that would get the plant visibility throughout the company. But when push came to shove, he went with what was familiar and comfortable to him. Going to the floor to see for himself, to truly understand, was not within his definition of a plant manager’s responsibility, and was not comfortable.

2. There’s a difference between a vendor and a strong technical partner. Clearly, the A1 line benefited greatly by working with Toyoda Machinery The X10 team selected the same types of machines that were currently making bad parts on existing lines— with no root cause yet identified—supposedly to get “commonality.” They picked separate jigs and fixture makers because of price and locality without considering the complex interactions between these and the machines themselves. Yoshina, as an experienced practitioner of the Toyota Way, knew that spending a few dollars more on good tooling and jigs now would yield a lower total cost over the lifetime of the product. While the X10 line was created by mixing several brands of machines in a way that had caused problems in previously installed X10 lines, the A1 group relied on the experience of Yoshina and TMW as to what machines and processes to utilize in manufacturing the pistons. Yoshina and TMW were able to draw on a vast database of machines and processes that would robustly accomplish the piston manufacturing task at hand.
3. There’s a difference between learning TPS conceptually and deeply understanding. This company had been doing lean training for years, and the vocabulary of TPS was well But there were specific challenges in machining that were not well understood. It was clear that the engineering teams were struggling to make the right technical choices despite their experience as engineers and having gone through TPS training.

A major difference between the X10 and A1 lines that probably led to many of the quality differences between them was how the tooling moved. The X10 tooling moved vertically, with the part clamped in the x-y plane. Due to the force of gravity, all chips and coolant would fall onto the tooling, leaving them on the parts.

Over time these wastes would build up and become a big contributor to defective pistons. In contrast, the A1 tooling moved horizontally, with the part clamped in the y-z plane. With this design, though the chips and coolant would still fall due to gravity, it would not fall onto the part, but into the chip separator, for the coolant to be reclaimed and the chips recycled. This is a subtle technical difference that requires the kind of attention to detail characteristic of the Toyota Way.

Another example of the technical differences between the two lines was the misapplication of the concept of one-piece flow by the X10 team. By applying the idea too literally in a machining environment, several things happened to the X10 process. First, the operator was underutilized. In a machining environment, an operator’s primary job is to check quality, change tools, and perform minor troubleshooting while picking up processed parts from one machine, setting them in the next, then pressing a cycle start button. If the person is only moving one piece at a time between machines, he or she has an extra hand free, and the process is wasting human operator potential. Moreover, the X10 team made a terrible mistake in terms of machine capacity. The machine they had purchased could make several pistons at a time, and the final product actually required four pieces, but they insisted on one-piece flow. (See the waste reduction model in Figure 5-1, Chapter 5.) The core philosophy is to reduce waste. Flow is a method used to surface problems, and single-piece flow is not always the best choice. In this case it added to waste.

4. Don’t settle for elaborate technical quality solutions when you can build in quality. Jidoka, or endowing a process with the human characteristic of being able to determine a quality product has been created, is a Toyota Production System term that the X10 and A1 teams took quite It appears that the data collection package the X10 group was considering would be used to make sure that no bad parts were passed on to the next process, an admirable goal. However, the system was geared toward uncovering defects, not preventing their creation altogether. This is an example of automating data collection rather than finding the root cause of a problem and quickly countermeasuring it. In comparison, the A1 line was designed to produce fewer defects, simply based on the physical machining characteristics and the process it operated within. The performance indicators of each line demonstrate that designing the process to reduce the production of bad parts from the outset vastly outweighs the results of simply catching errors that an inferior system creates.
5. The most cost-effective short-term decision can be the most costly in the long term. The decision to save $95,000 in up-front costs and not bring the metal-coating process in-house reduced initial capital expenditure but increased lead time and inventory. It also hindered the ability of Acme to solve problems quickly, since they were not in control of defects coming from the metal-coating process—defects that had been on the rise This is another example of short-term spreadsheet-cost thinking versus total lifecycle cost minimization.

Can You Metric Your Way to Lean?

You get what you measure! How many times have we heard that? If you measure pieces per labor hour in individual departments you get overproduction. If you measure variations from budget you get people trying to increase their budgets or cutting costs even for beneficial expenditures. If you measure quarterly earnings you get companies cutting all spending at the end of the quarter to make earnings look good. These are all true statements. Narrowly measure a very specific aspect of the business, and beat them up if they miss the numbers in the short term and you get managers directing energy to making the numbers look good, even at the cost of long-term improvement.

From a lean manufacturing perspective there are many good books on “lean metrics.” What are the right measures to drive lean improvements? In terms of our discussion of power, the lean metric discussion is about reward and coercive power. How can we pressure people through measures and contingent rewards or punishments to do the right thing?

We’ve been in the training and consulting game for many years, and the issue of the correct lean metrics always comes up. We always encourage a company

TIP Use a Set of Metrics as Indicators of Progress and Problems

Let’s face it, any large company is driven by metrics. There are certain metrics that get driven up top and are seen as measures of the health of the business. If these are traditional measures of labor cost variance, indirect to direct cost ratios, and such, all of the talk about lean can be for naught. We are talking one thing and measuring another. So the set of measures reviewed at the top should be broadened. The simple policy is to measure the Big Five in metrics: Quality, Cost, Delivery, Safety, and Morale (QCDSM). If all of these are measured, trends are tracked relative to targets, and top management responds to deviations from plan, you’ll be well on your way to supporting lean. The key is to not get out of balance. For example, if only cost is taken seriously, managers will quickly focus only on it. And if only labor costs are tracked they will get even more out of balance. Use multiple indicators of the business and treat them as just that—indicators. When the indicator suggests a problem, go and see to investigate what the real problem is. Then, develop true countermeasures to solve the true problem.

TIP A Standardized Process Can Be Effectively Measured and Improved

The whole point of measuring is to verify improvement. A process that is not standardized cannot effectively be measured. There is too much variation, and the resulting measure has no baseline for comparison. A process that has been standardized has defined agreements, such as takt rate and signals from the customer regarding demand, and the standardized use of resources ensures cost control. It’s very easy to determine whether a process is fulfilling its requirement to the customer. The voice of the customer is visible. Total cost can easily be measured because the base cost is always the same. Only the time factor changes. How long the process needs to operate to satisfy the customer varies based on actual process performance. What if the customer stops pulling? To prevent overproduction, the process must stop as the agreement defines. If my process stops producing, my cost will go up and my labor efficiency will go down. That is not fair to me, right? This is why it’s necessary to consider multiple measures when evaluating any process. Consistently servicing the customer at the lowest possible cost needs to be considered. Within Toyota, when a process is stopped because the customer is not pulling, the supplier process in not penalized. This time is considered “wait kanban.” The operation is waiting for additional signals from the customer, and this time is deducted from the available time so that the process productivity measure is not affected.

to look at their measures and ask two questions: “What measures are rewarding the wrong behaviors or punishing the right behaviors from a lean perspective?” and “How can we balance this out with measures that reward the right behaviors?” This is certainly a useful exercise. Nonetheless, there are a number of reasons that we get worried when we are asked about the right “lean metrics”:

1. There are more sources of power than rewards and coercion. Where are the other aspects of leadership to drive the right behaviors? Changing metrics is an easy, bureaucratic way to control behavior. It is often an excuse for failure to develop real leadership capability.
2. It is impossible to precisely measure all the right Unfortunately, if you measure behaviors A, B, and C, you are likely to focus on those behaviors and focus less on behaviors D, E, and F, which might be equally important but difficult to measure.

3. We are interested in creating motivation for innovation and continuous improvement. If you drag people around by the nose and direct them, you’re likely to get routine execution of what is measured, not innovative thinking.
4. We know that when rewards stop, or if the person gets the sense that the rewards are not being administered as intended, motivation stops.

We can’t think of anyone at Toyota who works on an improvement project solely for the money or the brownie points. Undoubtedly some do, but we can’t think of examples. In contrast, we know lots of people who knock themselves out at Toyota to do the right thing for the company. Mark Twain said with a touch of bitterness: “Always do right. This will gratify some people, and astonish the rest.” Wouldn’t it be nice if you could create a culture in which your team associates did astonishing right things without being directed by metrics?

The Toyota Way (Chapter 16) discusses the variety of motivators that Toyota taps into at work. Some are intrinsic, such as working to achieve a challenging goal and getting direct feedback from doing the task well. Others are extrinsic, such as getting praise from others or even getting small monetary rewards. But no one we know who is working on improvement expects that each time they solve a problem they can ring up the money in their cash register.

We’ve seen remarkable satisfaction, and excitement, when someone finishes a project and it gets significant results. The desire to please the customer, to contribute to the team, and to make Toyota a stronger company are all strong motivators.

You can’t measure your way to a lean learning organization, but metrics do play a critical role in any improvement process. The proper way to use metrics is as improvement targets. The well-known SMART objectives apply well to lean improvement (see the box below). Any improvement process should be driven by targets that have these characteristics. Then consistently measure and plot the measures on simple visual trend charts as discussed in Chapter 14. In this case, you aren’t trying to measure every aspect of performance of a group, plant, or manager. The work group or task force or managers are signing up for challenging but achievable targets for a specific improvement project, then measuring progress toward these targets. Toyota uses their hoshin planning process, a.k.a. policy deployment, to set aligned objectives from the president to the shop floor.

We’re often asked, “How can we sustain the progress we’ve made so far?” A simple checklist for auditing is a critical measurement in this regard. The only way we know how to sustain an improvement is to audit the area by going and seeing firsthand. The audit form in Figure 20-4 is for standardized work. By design, it’s very simple, with yes/no questions. Someone equivalent to a group leader does the audits based on a regular schedule set in advance, for example, every week or perhaps every two weeks. The results are summed up in a score, which is posted on a trend chart. There should be a target on the trend chart to judge progress relative to goals. Figure 20-5 is a sample audit form for a heijunka (leveling) system.

At NUMMI they have a somewhat more elaborate process for auditing standardized work. They have large kamishibai (story books) standardized work audit boards on the floor resembling employee punch cards. For each job there’s a card, with yes/no questions, in a vertical column of cards. The group leader checks one process each day by observing the team associate performing the process and comparing it to the standard work sheet. If there’s a discrepancy, he notes it and describes a countermeasure. The card for the audited job is put in the corresponding slot in the next column to the right to show that the audit was done that day. If there’s a problem, the card is turned backward with a dark side facing out to indicate there is some action to be taken. The assistant manager comes through daily to check the boards. There are over 90 boards in the NUMMI assembly plant. There are similar boards for Total Productive Maintenance (TPM). Managers do a lot of walking in Toyota plants to verify proper use of systems in each area.

Very often metrics are used in a passive way. Someone at the top reviews collected metrics in order to find operations that are deficient and read the riot act to the guilty party. What we have described with hoshin planning and the audit boards are active measures. The people doing the work set targets, track progress relative to targets, and take immediate action when they’re not on target. Managers come to where the work is being done to audit and discuss progress directly with the people doing the work. This is not part of the culture in many companies.

So the question is: How can you create a culture of continuous improvement so you don’t have to measure everything to entice improvement, and instead let motivated associates set aggressive goals and measure their own progress?

Changing Behavior to Change Culture

There’s a long history of social psychology studies concerning the relationship between attitudes and behavior. While the list of research studies are lengthy and the scientific terminology complex, the results are pretty straightforward. When people are asked questions about what they believe, their answers may

Standardized Work/IPCS Audit Form Standardized Work/IPCS Audit Form

Workcell: Operation # of

General:

Auditor Date

IPCS:

Specific Operation:

List any opportunities for improvement you have identified while performing this audit. Focus especially on ways to eliminate waste in this operation.

Please turn completed form in to your groupleader.

Attach copies of Standard Work Chart, time study and IPCS.

Figure 20-4. Auditing standardized work

03/12/01

DPS Office

Please turn completed form in to your groupleader.

Attach copies of Standard Work Chart, time study and IPCS.

03/12/01

DPS Office

Figure 20-5. Heijunka audit

or may not predict their actual behavior. For example, people can make strong claims about their lack of prejudice against minorities, but in an actual situation behave in a prejudicial manner. Sharing information and educating those individuals can influence what they say and how they say it, yet may not change actual behavior.

On the other hand, if we can change behavior, we can influence attitudes. For example, some people may not choose to work with certain minorities, but put them into a position where they must work side by side with that minority, and over time their attitudes are likely to change. One explanation for this is “cognitive dissonance” theory, which basically states that we want to bring our various beliefs into harmony. Knowing that we’re working with someone in a minority group, knowing they’re behaving in reasonable ways and contributing, and knowing that we do not like that minority group creates dissonance, and the easiest way to bring these facts into congruence is to change the negative beliefs about minorities: “Maybe they’re not so bad.”

It’s not as simple as this, but the bottom line is that we’re more likely to change what people think by changing what they do, rather than changing what people do by changing what they think. If we want people to understand and buy into the assumptions of lean manufacturing, let them experience it firsthand. Direct experience, with on-the-scene immediate coaching and feedback, will change behavior over time. On the other hand, trying to change what people believe through persuasive speeches, interactive video learning courses, or classroom training will not cut it. They might begin to say the right things, but it will not deeply impact beliefs or behavior (see, for example, “Tale of Two Pistons” case). Similarly, changing culture is not going to happen because of a classroom education process. We can teach people what is politically correct to say and sophisticated ways of saying it, but not affect deeply held values and assumptions. This is the unfortunate truth, though it might seem a lot easier to change culture en masse through an educational program than to have to remake the structure and processes of organizations in order to begin to change what people think. But lean is not about doing what’s easy. It is about doing what works.

It is about confronting reality and having the confidence that we can shape that reality to achieve our goals.

So is it worth even worrying about culture? Ironically, you cannot directly impact culture through communications and education. Yet culture holds the key to a sustainable competitive enterprise. So it cannot be ignored.

Toyota figured this out long ago. When Fujio Cho was first creating the Toyota house to explain the theory of TPS, there are stories of Ohno tearing up the pictures. Ohno believed that you learn TPS by practicing it . . . on the shop floor. He did not believe people would understand TPS by looking at a picture of a house. In The Toyota Way, President Cho explained the philosophy:

There are many things one doesn’t understand, and therefore we ask them why don’t you just go ahead and take action; try to do something? You realize how little you know and you face your own failures and you simply can correct those failures and redo it again, and at the second trial you realize another mistake or another thing you didn’t like so you can redo it once again.

From the beginning, the Toyota Production System has been about learning by doing. Anyone who has participated in or led a kaizen event experiences the intensity of the experience and the intensity of the learning. Within that team in that week, a microculture is being created. This microculture is often quite different from the culture in the everyday organization. In the microculture, trying things, sharing ideas, and even making mistakes are all valued. The group learns to see waste at a deeper level than usual and discovers it is possible to eliminate wastes they had lived with for so long. After the experience, they cannot look at things the same way again. We hear statements like, “I cannot believe I worked with that problem for the last 20 years and never did anything about it.” The waste starts to stand out, and they know how much better they can make things. Friday is a celebration of the accomplishments and reinforces the microculture that evolved that week. Then something terrible often happens. After a weekend of rest, Monday comes, and it’s back to business as usual. One of the problems with the kaizen event approach is that one week is not enough to change a culture. And when the week is over, the facilitator often moves on to another area, another group, and another event. Making these short-term interventions in culture and then walking away does not penetrate deeply anyplace. The real value of the event is not the money saved that week, but the potential for learning and cultural change . . . which is often not realized.

On the other hand, the value stream project has a much better chance to affect real culture change in the area of the project. The kaizen event can be one tool in the development of the value stream, but in the value stream approach the event does not stop on Friday. It is just one in a series of repeated activities over a fourto six-month period. After the intense period of the project, management attention must continue in order for the culture change to continue and deepen. It can easily take three or more years to develop a lean culture where people understand flow, see waste, feel free to eliminate waste, and develop the discipline to sustain changes.

If you can develop a new culture in one major area of an organization, how do you spread it? Is it a matter of starting over in each area one by one? The answer is no. There can be some transfer of learning in a number of ways:

1. Management, assuming they are involved, will learn a great deal from the They will strengthen their commitment to lean and have a much clearer, stronger vision. This will carry over to the next value stream project.
2. The internal lean coaches will learn from the experience, which will help accelerate the next one and the next one.
3. People from other areas will hear about the pilot project, and some will come and see and be influenced by what they see and hear.
4. There will be opportunities for movement of personnel from the pilot, perhaps even as future lean coaches, to other areas to directly carry the culture with them.

The short of it is, the new culture will be transmitted only through people, by direct transfer of people who have experienced and been part of the cultural change. Transferring workers or supervisors is a very powerful way. In some cases jobs are eliminated in the pilot, and the people freed up can move to other areas or become part of the kaizen promotion office. What many managers miss while engaged in lean transformation is that the person whose job was eliminated is not simply waste to be eliminated. That person is an active piece of the new culture that the manager should be trying to foster. That person is extremely valuable if the value is exploited.

Toyota understands the importance of and challenge of cultural change. As they’ve opened operations in other countries, they place the highest importance on developing the Toyota Way culture in each operation they set up. They do this through the coordinator system. Thousands of Toyota coordinators have been deployed around the world, and their primary job is to teach the Toyota Way culture. It is not a matter of coming over for a week or two and teaching a class, but for two to three years, and mentoring every day. They challenge the student to accomplish a goal and then wait and watch for coaching opportunities.

A common question we are asked is: “Can the Toyota Way work outside of Japan since Japan’s culture is so unique?” There is no question that Japan has a different culture, and in many ways it fits quite nicely with the principles of the Toyota Way. After all, the Toyota company culture evolved within the Japanese culture. The Japanese discipline, attention to detail, team orientation, dedication to company, lifetime employment, slow promotion, reflection (hansei), striving for perfection, and on and on, all strongly support the Toyota Way. Yet Toyota has had considerable success in moving their system to other countries. Over time, the company has learned that they cannot build the Toyota culture of Japan intact in other countries. They must allow the culture to adapt to the local culture. The result is a hybrid culture—a new combination of the local culture and original Toyota culture. But the Toyota value system is not compromised.

How much has changed in this adaptation is a matter for debate. Some might argue that the new culture is totally different. Americans, for instance, are not willing to put work before family and personal life as we see so often in Japan, are not as disciplined to follow standard processes, always want to know why they should do it this way, are individualistic, want individual rewards and recognition, are impatient, and they naturally think short term. But though there is some truth in each of these statements, Toyota has done a remarkable job of transferring many key features of the Toyota culture in Japan to countries like America, including:

Teaching Americans to see and eliminate waste.
Teaching practical problem solving the Toyota Way.
Teaching the value of standardization as a foundation for kaizen.
Teaching passion for customers and quality.
Teaching the importance of teamwork.
Teaching the value of people.

TRAP Training Your Way to a New Culture

In Chapter 19 we described the “Company X Production System Approach,” where X is your company name. This is often intended as an enterprise wide approach to drive a common operating system. It’s a noble idea, and one to which we subscribe. The problem is when it’s viewed as a top-down way of driving culture change through a staff organization. You cannot PowerPoint your way to a new culture. All the slick multicolor slides and training packages in the world will not change a culture. Simply “telling them” does little good. People will get more aware of the words and concepts that can help if there is a deeper cultural change through leadership, direct experience, and the transfer of personnel to teach and coach others into the new culture. But as a stand-alone process, training and communications do not change what people truly believe and feel and how they behave. We worked with one of our clients to develop excellent model line pilots over a one-and-a-halfyear period developing strong local expertise in the process. When they decided to deploy lean from the central office they did not even promote those people involved but rather selected people with no experience to be trained in a classroom and assume lean leader roles. What a waste!

Spreading Your Learning to Partners

If partners are truly extensions of the lean enterprise, then the culture must be spread to partners. Let’s take the example of Denso discussed in Chapter 19. Since Denso is one of Toyota's original keiretsu suppliers, partly owned by Toyota, one would think they were always thoroughly steeped in TPS. Yet they realized that they had not achieved the level of TPS they saw at Toyota plants. They had used many technical methods similar to TPS but did not have the “kaizen mind” of Toyota. The countermeasure was the EF activities represented by a triangle.

It is no surprise that this triangle is called the Takahashi triangle after Denso chairman, Takahashi, who retired as a Toyota senior executive. One of his jobs at Denso is to create a culture compatible with that of Toyota. If Toyota develops a culture of continuous improvement by all associates that is far more advanced than Denso, how can Denso keep up?

Why does Denso need to keep up as long as they give Toyota the price they ask for? As we discussed in Chapter 12, Toyota does not want to manage supplier price. They want to manage supplier cost. As Toyota reduces cost through the myriad activities of team associates solving small problems every day, they will hit the wall if their suppliers’ costs reduction efforts are not every bit as intense. The supplier cost will become a bottleneck in the process. And supplier costs account for most of the cost of Toyota vehicles. If suppliers agree to price reductions but do not reduce actual costs, they will become unhealthy suppliers. They will not have the cash to reinvest in the business and in future technologies. If suppliers reduce costs by beating up employees and suppliers and other short-term cost cutting measures, the basic infrastructure of the supply base will crumble.

In Chapter 3, we talked about the process of stabilizing, creating flow, standardizing, and leveling incrementally. We said that to connect two operations in a plant, each operation needed some degree of initial stability. They could then be connected in some degree of flow. This becomes the new standard, and there’s an opportunity to do some leveling. We then described the continuous improvement spiral, where this process continues at deeper and deeper levels. Instead of two operations in a plant, imagine an assembly plant and a supplier plant, and the same principle applies. Each plant’s processes must be stabilized, and then they can be connected, the new process standardized and then incrementally leveled. This is repeated in a continuous improvement spiral over time.

Now consider a company like Denso sending after-market parts to a Toyota service parts warehouse. Then consider Denso’s product development organization designing the heating, ventilation, and air-conditioning system along with Toyota engineers developing a new car. And how about the Toyota sales organization selling cars to dealers? In each case the principle is the same. Each partner, along with Toyota, must stabilize to a new level, create a connected flow, standardize, and then incrementally level. This is the process of continuous improvement. If Toyota stabilizes at a level well beyond that of their partners, the process stops.

Toyota wants its partners to be independent because if they’re dependent and looking to Toyota for constant guidance, they will never have the strength to improve themselves. Toyota cannot drive improvement to the level they want from outside, so they say that it’s fine if their suppliers have their own way, not the Toyota Way. In fact, it’s encouraged . . . as long as it works. When there is a serious quality problem or a launch problem or a problem that might shut down Toyota, then the Toyota crew jumps into action and begins to teach the supplier the Toyota Way. They may not call it that, but they’re teaching all the principles described in this book. In our experience, the Toyota suppliers are anxious to learn, because they know it is a better way.

So there are some strong prerequisites for changing your partners along with your internal operations to create a mutually compatible culture:

1. You must be seriously doing it yourself internally.
2. You must develop true leaders whom the suppliers want to follow and learn from.
3. You must have patience in teaching the suppliers.
4. Suppliers must want to be taught by you.
5. Suppliers must see value added to themselves by learning.
6. Suppliers’ independence must grow over time; they must develop their own lean culture.

TRAP Jumping the Gun on Teaching Lean to Suppliers

We cannot emphasize enough how important it is to be seriously doing lean yourself before trying to spread it to suppliers. We have seen truly ridiculous situations where larger companies brimming with machismo decide to bring lean to the little people— their small and inferior suppliers. The problem: The big, powerful customer has done nothing more than a lot of talking, a lot of PowerPoint presentations, and a few limited models. The suppliers, in contrast, worked hard at lean and were far ahead of their customers. Having these customers come to teach lean and then ask for price reductions was akin to hunting and gathering.

Again, Toyota wants suppliers to have their own cultures. But they want those cultures to be compatible with that of Toyota’s, so the basic principles of the Toyota Way must be realized in the suppliers. For example, if the suppliers were to have a traditional large batch, top-down culture, their costs would probably be too high, and they’d risk shutting down Toyota, and Toyota would not stand for this. But if the supplier has its own version of a lean culture and it works, that’s wonderful as far as Toyota is concerned.

Delphi, discussed in Chapter 12, is in the very early stages of working to develop a Toyota-style lean enterprise with its suppliers. Delphi purchasing executives realize the key to their success is winning the supplier’s trust. Toward this end, they included as one of their key performance indicators a supplier survey. They contracted with Henke’s Planning Perspectives company, which does the supplier surveys for all the major automakers, and requested a special survey of Delphi’s suppliers working at the tier-two level. The results in 2004 were not pretty. Delphi was not perceived as a trustworthy and reasonable customer. This was not a surprise to Delphi after years of getting beat up by customers and turning around to beat up their own suppliers. Now they had to change this adversarial relationship to a win-win, cooperative relationship. Delphi is working on this supplier by supplier. They started by sending topnotch lean experts—some outside consultants and some internal—to help their suppliers lean their processes. This was a huge success and began the process of winning over suppliers. It will be some time before a large portion of Delphi’s key suppliers believe and trust, but Delphi is willing to make the investment and have the patience to spend years transforming to a lean enterprise. Over time they are striving to create compatible cultures and trusting relationships internally and with their supplier partners.

Now Please Try . . . and Do Your Best

While David Meier worked at Toyota in Georgetown he was often asked to “do your best.” This was not so much an instruction as a genuine request. It was expected that every individual did his or her very best. There was no need for discussion of “right or wrong” or “good or bad.” Team associates all simply put forth their best efforts. It was all that was asked. We think that this request has a place in every company faced with the challenges of implementing a version of the Toyota Way. Everyone must give his or her best effort.

In addition, David would often be asked to “please try,” and if for some reason he was avoiding the request, he was told to “just do.” It seems some people are afraid to try things for fear of making a mistake or getting them wrong. One thing is for certain: If you never make a mistake, you’re not doing anything. When a request seemed to be greater than his capability, David was simply asked to “please try.” That is one of the best suggestions we can make to anyone. It’s necessary to try some of the things mentioned in this book before you understand the true meaning or value.

If you’re having a hard time convincing yourself or others to try, then “just do.” It was after several instances of doing that David discovered the meaning of the TPS philosophy. There was no other way it could make sense to him. The only way to gain true understanding was through doing. We like to suggest to companies that when they first learn a concept, try it, then think and reflect on the result to learn more, and then try again, and again. At Toyota, team associates were always encouraged to keep trying, to keep improving, and to never stop growing and developing.

Sometimes the simplest lessons provide the most profound education. We have been fortunate over the years to work with many exceptional teachers of the Toyota Way. It has not always been an easy education. On one particular day David’s mentor, Mr. Takeuchi, was insistent that he complete a particular task immediately. David was fairly busy and had his attention on other issues. He explained that he would take care of Takeuchi’s request in a few weeks (he said “Atto dei,” which means “Later” in Japanese). But Takeuchi gently suggested that David complete his request immediately—ima in Japanese. This tug of war went back and forth, with David insisting he would take care of it later and Takeuchi suggesting that he would prefer immediately. One thing about Mr. Takeuchi is that he is both patient and persistent. Ultimately his persistence won out over his patience. Finally, he motioned David to the nearest meeting room where there was a white board, drew a stair step diagram (Figure 20-6) and said, “Dave-san, our job is, every day, little up.”

Figure 20-6. Every day, little up!

Drawing an arrow parallel to the stairs, he said, “Then, over time, we up!” (Figure 20-7).

In a moment like this, valuable lessons are often lost. In this case David just wanted to get Takeuchi off his back, so he complied with his request. Sometime later David realized the power within this simple message. Toyota simply strives to make small gains continuously, every day. If they can make these improvements consistently over time, the company will grow stronger. It was the leader’s responsibility to ensure that everyone was making some contribution every day, no matter how small. These contributions would surely lift the group and company over time. David came to understand how strongly this philosophy ties to Toyota’s philosophy of long-term thinking and planning. They are clearly in it for the long haul. They understand that a tortoise who methodically moves forward will not only finish the race, but also can beat the speedier, inconsistent hare.

Figure 20-7. Then, over time, we up!

Another lesson also became clear. It’s necessary to take a first step up the stairs before it’s possible to see the next step, or to see the potential benefit of moving forward. We’ve said this before, but it bears repeating: Imagine that you are standing on the stairs. If you look straight ahead, you only see the visible step. As you take a step up, new opportunities become visible (Figure 20-8).

“Every day, little up”

“Until you take the first step, it will not be possible to see the next step.”

Figure 20-8. Continuous improvement never ends

This also applies to the change process. Some potential improvements will remain hidden until you take initial steps. Then suddenly opportunities appear that you never saw before. So there is this paradox: If you do not take steps, the opportunities may not present themselves to you. It is a natural incremental process of learning by doing. You start the journey and then adjust it as you go.

Unfortunately, it’s not always easy for people to try and risk failure. A University of Michigan professor, Fiona Lee, and her colleagues have been studying the phenomena of trying.5 They have been doing psychological experiments in which subjects need to try a lot of alternatives and learn from success and failure if they want to get through a type of maze. It is a rug on the floor full of squares with some electronics hidden underneath in a pattern. If they step on the wrong square, they trigger a loud “beep.” But by trying a lot of squares and getting beeps, they learn the pattern and can get through the maze. They find that often people just get stuck and refuse to keep moving forward because they’re afraid to trigger the dreaded “beep.” This is to some degree cultural. Americans, who have been raised to believe in rugged individualism, hate to fail. There is a stigma of appearing incompetent, and American culture discourages experimenting, trying something new, reflecting on failures, and asking for help—even when they desperately need help and help is available. These results are true of American male and female professionals in Lee’s experiments—there is no significant gender difference.

The piecemeal changes that David was learning, one step at a time, can be quite threatening. Do something new each day. Take a risk each day. Risk a beep. This may explain another phenomena we have observed. When we first start to work with companies, they often ask: “Is there a company like ours that has implemented lean that we can go visit?” This can be as specific as wanting to see a low-volume, high-mix decorative toilet seat company, or a prototype design shop for prosthetic devices, or a low-volume medical lab that does specialized blood tests, or a highly automated glass-making plant, or name your type of company. Unfortunately, there is not one of everything in the world that is a lean model—there are all too few lean models outside Toyota and its suppliers. What we think they’re telling us is: “Paint me a detailed picture of exactly what the destination will look like in my business before we start the journey.” The other question asked is: “What exactly can we expect in terms of cost savings and what will it cost to go lean?” In other words, put in numbers precisely what we can expect so we don’t have to take a risk. Fear of taking this step by step and figuring it out as we go is one reason there are so few good lean models, and overcoming that fear requires a leap of faith.

Fiona Lee and her colleagues also discovered another interesting finding in their experiments. Inconsistency in messages about taking risk kills the drive for innovation. People are more likely to take the risk if the failures are not punished and there is support that failure is acceptable—you need both of these things combined. Interestingly, if there are supportive statements about how taking risks is valued but then people are punished, or if they’re not punished for failing but get the message that failure is unacceptable, they are less likely to take any chances and more often get stuck. In fact—and this is the most interesting finding—if they’re told that taking risks is unacceptable, and they’re punished for taking risk, they are still more likely to take risks then if they get inconsistent messages. This is startling. It seems that the worst thing is inconsistency.

In many organizations we’ve worked with there are too many inconsistent messages. Trying and experimenting are supported in the kaizen event but not in daily work. Top management is preaching change but middle managers are preaching production and business as usual and punishing any production disruptions. Management is preaching to stop and fix problems to achieve high quality, but in the heat of production workers are instructed to put their heads down and get production out at all costs. Management says it’s okay to innovate and experiment, but then punishes people for failing. This threatens feelings of individual competence and superiority—both highly valued in Western society.

None of this is easy. It’s all very risky. We can only imagine that The Toyota Way and The Toyota Way Fieldbook are a little overwhelming. People are inspired and excited about the possibilities, but there is so far to go. Virtually every aspect of every process and every aspect of the culture needs work. Yet, if you think of it that way, you are apt to get frozen. Then you will only be looking at the visible step ahead . . . or even worse, looking down at the step you’re on. About the best advice we can give is to “please do” . . . and “please try your best.” Remember, “Every day, little up!”

TIP Consistent Messages Will Dictate Behavior

In Chapter 11 we referred to continuous improvement within Toyota and how a consistent message regarding what “continuous” means is critical to the thinking and resulting action. We see other companies attempt to model continuous improvement and then place several criteria on when the improvements are acceptable. Many improvements are overlooked because it isn’t clear if they are “worthy” or acceptable. This is how the process gets bogged down and innovation dies. If you say you want continuous improvement, you must literally mean continuous, all the time, under all conditions, without regard to merit, complexity, or significance. No improvement is too small, and the right time is always now.

Reflection Activities

This is the most serious reflection of all. We are asking you to reflect on whether you are serious about getting started on a real lean journey. We have worked to paint a picture in this book of what that looks like in detail. It is clearly much more than the technical trickery of many lean programs. It is a serious lifetime commitment to building a culture of continuous improvement. Are you ready? This question would apply whether you are brand new to lean or have been at it for 10 years but not in the deep sense of the Toyota Way. Ask yourselves the following questions and begin on whatever path you choose. We use the term “you” not to refer just to the reader but to a critical mass of leaders in the organization.

1. Does your organization have top leaders who are seriously dedicated to becoming a lean learning enterprise? If not, do they at least seem seriously coachable?
2. Are you committed to this process for the long term (forever)?
3. What steps will you need to take to prepare yourself for this process?
4. Are you willing to make enough of a commitment to take time to learn, to observe deeply (genchi genbutsu), and to participate in continuous improvement?
5. How will you mentor others? Do you have the personal tools to do that?
6. How will your organization get the sensei support needed for this transformation?
7. Is your organization full of conflicting and inconsistent messages? If so, develop a communication plan for beginning the process of sending consistent messages.
8. What will be necessary to change the culture so that a singular, consistent message develops?