November 2007 Lean Transformations Group, all rights reserved 1 Leadership for the Transition to LEAN as a way of doing business David Verble Tom Shuker Lean Transformations Group

November 2007 Lean Transformations Group, all rights reserved 2 Leadership: Three Models “Do it my way…” Old “Dictator” Style: “Do it my way…” “Do it your way... ” 90s “Empowerment” Style: “Do it your way... ” “Follow me”Lean Style: “Follow me”

November 2007 Lean Transformations Group, all rights reserved 3 Lean Leadership The “Leader as Dictator” of the old days tried to tell everyone what to do.The “Leader as Dictator” of the old days tried to tell everyone what to do. – No transfer, or Cascade of Responsibility The “Leader as Social Worker” of the 80s and 90s just set “goals” and let everyone do as they pleased.The “Leader as Social Worker” of the 80s and 90s just set “goals” and let everyone do as they pleased. – Loss of direction, purpose, focus and sense of role. Loss of control.

November 2007 Lean Transformations Group, all rights reserved 4 Lean Leadership The Lean Leader leads a very different way:The Lean Leader leads a very different way: – By influence by example of good thinking by example of good thinking by being knowledgeable by being knowledgeable by getting into the messy details by getting into the messy details by questioning by questioning by coaching and teaching by coaching and teaching – By building robust, sensible systems and processes that cascade responsibility & enable people to work effectively and without waste of their time and effort

November 2007 Lean Transformations Group, all rights reserved 5 Lean Leadership  Traditional “Leadership” as noun: “leaders are born” “Leadership” as noun: “leaders are born”  Lean “Leadership” as verb: “take leadership”“Leadership” as verb: “take leadership”

November 2007 Lean Transformations Group, all rights reserved 6 Toyota Responsibility = Authority It’s not “bottom-up”.It’s not “bottom-up”. But, neither is it “top-down”.But, neither is it “top-down”. Rather, it’s a dynamic system in which processes are usually well-defined, roles agreed to and understood and individual responsibility almost always clear.Rather, it’s a dynamic system in which processes are usually well-defined, roles agreed to and understood and individual responsibility almost always clear. “Authority” is rarely an issue -- emphasis is on “doing the right thing,” not “establishing one’s rights (authority).”“Authority” is rarely an issue -- emphasis is on “doing the right thing,” not “establishing one’s rights (authority).” The focus is on getting good decisions made rather than the authority to make decisions.The focus is on getting good decisions made rather than the authority to make decisions.

November 2007 Lean Transformations Group, all rights reserved 7 A dramatic contrast (in my experience):A dramatic contrast (in my experience): At many conventional firms,At many conventional firms, – Responsibility is rarely clear – And there is endless fighting over escaping it At Toyota,At Toyota, – Responsibility is always clear – And there is endless fighting over increasing it Toyota Responsibility = Authority

November 2007 Lean Transformations Group, all rights reserved 8 Decision-making Responsibility In a traditional functional/hierarchical organization: – Position establishes (or seems to) authority to make decisions. – -> In siloed-functional organizations, this causes confusion, frustration, and breakdown of coordination for the best for the whole company. In a Value-Stream Organization: – Position establishes responsibility to get decisions made.

November 2007 Lean Transformations Group, all rights reserved 9 True “Consensus” -- Agreement to “get decisions made” It does not mean everybody has to be in complete agreement. It does mean there is agreement that the responsible person has presented a case that makes sense (based on the facts and purpose) and he/she can proceed (with the experiment) as proposed with full support.

November 2007 Lean Transformations Group, all rights reserved 10 Toyota: Problem-Solving Decision-making and all actions revolve around problem- solving and planning – and problem solving some more.Decision-making and all actions revolve around problem- solving and planning – and problem solving some more. It is assumed that there will be problems, that everything will not go according to plan.It is assumed that there will be problems, that everything will not go according to plan. “ No problem is problem.”“ No problem is problem.” For the system to work, problems must be exposed and dealt with forthrightly. That’s how things are improved.For the system to work, problems must be exposed and dealt with forthrightly. That’s how things are improved. Hiding problems will undermine the system.Hiding problems will undermine the system.

November 2007 Lean Transformations Group, all rights reserved 11 Toyota: Burden of Proof At Toyota, the “burden of proof” is clearly on the person proposing change, who must justify why a given proposed action is necessary. Reason? Employees are closer to the actual work and are expected to know the facts of what is happening. Managers, however, are expected to know more about business priorities and strategic aims and what will align with them.At Toyota, the “burden of proof” is clearly on the person proposing change, who must justify why a given proposed action is necessary. Reason? Employees are closer to the actual work and are expected to know the facts of what is happening. Managers, however, are expected to know more about business priorities and strategic aims and what will align with them. Managers in Toyota rarely say “Yes” easily – they usually simply ask “Why?” What is purpose?. What are the facts? But, conventional managers are forced to explain to employees why they should not pursue a given action.Managers in Toyota rarely say “Yes” easily – they usually simply ask “Why?” What is purpose?. What are the facts? But, conventional managers are forced to explain to employees why they should not pursue a given action. This is a huge difference in determining company focus. This is a huge difference in determining company focus.

November 2007 Lean Transformations Group, all rights reserved 12 Toyota would say this is nothing more than the P-D-C-A Toyota would say this is nothing more than the P-D-C-A management cycle they learned from Deming. management cycle they learned from Deming. – Yet, my own observations say this is precisely the thing that “we” can’t seem to do. – Why? Surely one major reason for this is the way we lead and manage: Surely one major reason for this is the way we lead and manage: Focus on results rather than process. Focus on authority rather than responsibility. Focus on our part rather than the whole. Focus on blame rather than learning. Focus on control of decisions rather than engaging everybody in thinking at their level. Toyota: PDCA Thinking

November 2007 Lean Transformations Group, all rights reserved 13 Cascade of Responsibility ….from the Strategic to Operational Levels 1.Who is going to be Responsible for Addressing? 2.What PROBLEM in Performance to Purpose? 3.That is Occurring or Being Created in What Primary or Secondary Process? 4.And Deliverables or Expectations for Effectively Addressing the Problem

November 2007 Lean Transformations Group, all rights reserved 14 If “managing” is about thinking... …then “leading” is about getting other people to think.

November 2007 Lean Transformations Group, all rights reserved 15 If improvement is about taking responsibility and initiative… Leading is about getting other people to take initiative.

November 2007 Lean Transformations Group, all rights reserved 16 What barriers discourage people from thinking and taking responsibility? You, me or somebody rushes in to give them them the answer. It is more important to give them the right question than the right answer. April, 2003

November 2007 Lean Transformations Group, all rights reserved 17 Teach the Scientific Method Ask: What is the real problem? What is the root cause? Use the “Five Why” process. Demand “Countermeasures” Vs. “solutions”. Make their theory of what will work explicit. Ask: How will you know if your countermeasure worked? Where will you look for its impact? PDCA, Kaizen, Continuous Improvement, -- all are essentially the scientific method.

November 2007 Lean Transformations Group, all rights reserved 18 Steven Spear’s Four Learning Points about Leading at Toyota 1. There is no substitute for direct observation. 2. Proposed changes should always be structured as experiments. 3. Workers and managers should experiment as frequently as possible. 4. Managers should coach, not fix 5. from “Learning to Lead at Toyota” HBR, May 2004

November 2007 Lean Transformations Group, all rights reserved 19 Where Do You Start - From Top or Bottom? Change Culture First (Conventional way) Change System First (Lean Way) Lean Enterprise Implementation

November 2007 Lean Transformations Group, all rights reserved 20 It’s easier to act your way to a new way of thinking than to think your way to a new way of acting. Lean Enterprise Implementation