Lean Enterprise Transformation

Lean Global Networkwww.lean.org

November 2014

Lean Global Network

The Lean Global Network• LGN is a network of mission-driven institutes taking

responsibility for bringing lean thinking and practices to their countries and the world

• We believe lean thinking and practice can:– Improve the performance of organisations and raise living

standards– Enable prosperity while minimising resource use and

environmental impact– Provide more fulfilling work and personal development for

everyone– Enable consumers to create more value (consumer at center of

value-creation)

Lean Production, Lean Thinking, Lean Practice, Lean Learning

john shook

Timeline: Lean

1950 1950 1956 1962 1968 1974 1980 1986 1992 1998 2004 2010 2014Today

A lean future?11/6/2014

Toyota Crises – Financial loss

and recalls2008

3rd Boom - Toyota Way 1/1/2004

Machine That Changed the World

1990

2nd Boom - Lean Production, IMVP,

consultants

9/17/1988

NUMMI12/12/1984

Early Explorers to Toyota City

1980

1st Boom of learning from Toyota

1973

OMCD 1968

Chief Engineer1955

Experiments in TPS and other Toyota Way Pieces1950

Rebuilding Japan (TQC, TWI, PDCA)

1950

Incubation 1950 - 1980

Diffusion and Dilution 1984 - 2014

Future Direction 11/6/2014

A Simple Definition of Lean Thinking & Practice

Systemically develop people and continuously improve

processes to create value and prosperity while consuming

minimum resources.

Every Organization Must Address

• Purpose – Provide value to customers (cost-effectively to prosper, etc.).• Process – Through value streams that are designed, operated, improved.• People – By engaging and respecting employees and other stakeholders.

Aligning purpose, process, and people is the central task of management.

7

People & Process Balanced by Leaders

8

Lean as a Social & Technical System

Social

Lean as a Social & Technical System

Technical

Process and People

• We should teach the art & craft of science.

• Science will give us a good technical answer.

But…

• being technically “right” is only half the “battle”.

11

People & Process – aligned by leaders to achieve purpose

Lean Transformation

Aligning:

•Purpose•Process•People

to create value

WHAT is our

PURPOSE?What situational problemdo we need to address?

How to improve the work?

How to develop

the people?

What is our BASIC THINKING??What is our BASIC THINKING??

What leadership

behavior and

management

system do we need?

Lean Transformation Model

PROCESSPROCESSIMPROVEMENTIMPROVEMENT

Continuous, Continuous, practical practical

changes to changes to improve the way improve the way the work is donethe work is done

CAPABILITY CAPABILITY DEVELOPMENTDEVELOPMENT

Sustainable Sustainable improvement improvement

capabilitycapabilityin all people in all people at all levelsat all levels

VALUE-DRIVEN PURPOSE VALUE-DRIVEN PURPOSE - Situational Approach - - Situational Approach -

““WHAT PROBLEM ARE WE TRYING TO SOLVE?”WHAT PROBLEM ARE WE TRYING TO SOLVE?”

Basic Thinking, Mindset, AssumptionsBasic Thinking, Mindset, AssumptionsThat drive this transformationThat drive this transformation

BehaviorsBehaviors

MANAGEMENTMANAGEMENTSYSTEMSYSTEM

Lean Transformation

Transformation Questions1. Have you made the purpose or mission clear to everyone? Does

everyone know their value to create, their problem to solve?

2. Have you defined the work to be done? Is it being improved?

3. Do you have the necessary capabilities? How are you developing people?

4. Do you have the management system and do your leaders exhibit the needed behaviors (to develop capability to do the work to accomplish the mission)?

5. Do you understand the current basic thinking (mindsets, assumptions) and grasp its impact on the organization and its culture? What are you going to do about it?

Transformation Questions1. Have you made the purpose or mission clear to everyone?

Does everyone know their value to create, their problem to solve?

2. Have you defined the work to be done? Is it being improved?

3. Do you have the necessary capabilities? How are you developing people?

4. Do you have the management system and do your leaders exhibit the needed behaviors (to develop capability to do the work to accomplish the mission)?

5. Do you understand the current basic thinking (mindsets, assumptions) and grasp its impact on the organization and its culture?

What are you going to do about it?

Transformation Questions1. What is our purpose or what problem are we

trying to solve, what value to create?WHAT is our

PURPOSE?

What situational problemdo we need to address?

What Problem are We Trying to Solve?

Okay, so that’s where we need to go…

“Which way to True North?”

Purpose Statement: Newport News Shipbuilding

“We shall build good ships here.

At a profit—if we can.

At a loss—if we must.

But always good ships.”- Collis Huntington

(Now Huntington Ingalls)

Hoshin ProcessBreaking Down Company Problems and Solving Them

at Each Level

21

Company-Level

Division-Level Hoshin

Group/Individual Problem Solving

Breakdow

n of Hosh

in Individual Contribution

Sustained high

performanceEmployee

Motivation

Purpose/Problem At Each Level

Each person with responsibility for his or her situational problem to solve!

Transformation Questions1. Have you made the purpose or mission clear to everyone? Does

everyone know their value to create, their problem to solve?

2. Have you defined the work to be done? Is it being improved?

3. Do you have the necessary capabilities? How are you developing people?

4. Do you have the management system and do your leaders exhibit the needed behaviors (to develop capability to do the work to accomplish the mission)?

5. Do you understand the current basic thinking (mindsets, assumptions) and grasp its impact on the organization and its culture?

What are you going to do about it?

WHAT is our

PURPOSE?

What situational problemdo we need to address?

How to improve the work?

Process Improvement…

What is the work to be donein order to get there…?

Process Improvement at ALL Levels

Macro Enterprise System Level

Value Stream Level

Factory, Hospital, Office, Department Level

Micro Level of Each Individual Job

Lean Process Design

Give a good process to the people who do the work…

Lean Process Design

Transformation Questions1. Have you made the purpose or mission clear to everyone? Does

everyone know their value to create, their problem to solve?

2. Have you defined the work to be done? Is it being improved?

3. Do you have the necessary capabilities? How are you developing people?

4. Do you have the management system and do your leaders exhibit the needed behaviors (to develop capability to do the work to accomplish the mission)?

5. Do you understand the current basic thinking (mindsets, assumptions) and grasp its impact on the organization and its culture?

What are you going to do about it?

WHAT is our

PURPOSE?

What situational problemdo we need to address?

How to improve the work?

How to develop

the people?

Capability Building…

What skills do we need to get the work done…?

Lean Capabil i ty Development

“Make people as you make product…”“Make people as you make product…”

Lean Enterprise – the ultimate “social-technical system”

33

• The process of doing the work is integrated with the process of improving the work, and…

Lean Enterprise – the ultimate “social-technical system”

34

• The process of doing the work is integrated with the process of improving the work, and

• The operating processes ARE people development processes

Lean Tools and Lean Learning

The tools bring obvious “mechanical” or tangible benefits.

They are also frameworks to develop people AND make it:

– easy to see problems

– easy to improve

– easy to learn from

STOP! To build in quality, to solve problems, to develop people…

Stop to Achieve Purpose, Solve Problems and Develop Capability

•Design a routine – provide training–Make success understandable and do-able

•Make it easy to see problems–Anything that interrupts the routine

•Make it clear what to do for problems–Contain and notify (“neither accept nor pass on…”)

•Make it clear what will happen after notification–Help will come within the cycle of work

•Ensure problem-solving and learning –Through structured routines for problem-solving and rapid cycles of learning

Lean Tools and Lean Learning

The tools bring obvious “mechanical” or tangible benefits.

They are also frameworks to • develop people, and • make it:

– easy to see problems– easy to improve– easy to learn from

Transformation Questions1. Have you made the purpose or mission clear to everyone? Does

everyone know their value to create, their problem to solve?

2. Have you defined the work to be done? Is it being improved?

3. Do you have the necessary capabilities? How are you developing people?

4. Do you have the management system and do your leaders exhibit the needed behaviors (to develop capability to do the work to accomplish the mission)?

What leadership

behavior and management

system do we need?

WHAT is our

PURPOSE?

What situational problemdo we need to address?

How to improve the work?

How to develop

the people?

What leader behavior and management

system?

Management, Leadership…

How will we manage the work?What behaviors must leaders exhibit??

The Lean Leadership Challenge• Enable each person to take

responsibility to solve problems and improve his or her work

• Align each persons’ work to provide value for the customer and prosperity for the organization

Get the work done and Develop Capabil i ty- at the SAME TIME!

Begin with Yourself!!

Leadership Styles

What leadership

behavior and

management

system do we need?

WHAT is our

PURPOSE?

What situational problemdo we need to address?

How to improve the work?

How to develop

the people?

What is our BASIC THINKING??What is our BASIC THINKING??

What leader behavior and management

system?

Transformation Questions1. What is our purpose or what problem are we trying to

solve, what value to create?

2. How do we improve the actual work?

3. How do we develop the people?

4. What role must leadership take and how does the management system support the new way of working?

5. What basic thinking or assumptions underlie

this transformation?

What basic thinking underlies all this…?

Does this really make sense to everyone???

What mindset do we have? What do we need?

What underlying assumptions??

How to Transform?

It’s easier to act your way to a new

way of thinking than to think your way to a new way

of acting.

It’s easier to act your way to a new

way of thinking than to think your way to a new way

of acting.

How to Transform?

Developing Capability Implementing solutions to do things right…

versus

Testing to find things gone wrong

Design of Process,Design of Work Experience

Basic Thinking – Lean Thinking

• Principle of “Just Enough”

• Practice of Questioning and Experimenting– Structured Questions and Experiments

So, What Must Lean Leaders Do?

Lead/support the creation of work streams that flow value to customers

Lead/support the creation of systems that develop people to take personal

responsibility to continuously improve processes and solve problems

Establish alignment around a vision to achieve the

purpose of the organization

Lean Thinking • Principle of Respect for

People

• Practice of Continuous Improvement

53

Unending learning…to make things better…in everything…everywhere