Lean Enterprise Transformation Lean Global Network 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 Today A lean future? 11/6/2014 Toyota Crises – Financial loss and recalls rd Boom - Toyota Way 1/1/2004 Machine That Changed the World nd Boom - Lean Production, IMVP, consultants 9/17/1988 NUMMI 12/12/1984 Early Explorers to Toyota City st Boom of learning from Toyota 1973 OMCD 1968 Chief Engineer 1955 Experiments in TPS and other Toyota Way Pieces 1950 Rebuilding Japan (TQC, TWI, PDCA) 1950 Incubation Diffusion and Dilution 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 problem do we need to address? How to improve the work? How to develop the people? What is our BASIC THINKING?? What leadership behavior and management system do we need?

Lean Transformation Model PROCESSIMPROVEMENTContinuous,practical changes to improve the way the work is done CAPABILITYDEVELOPMENTSustainableimprovementcapability in all people at all levels VALUE-DRIVEN PURPOSE VALUE-DRIVEN PURPOSE - Situational Approach - “WHAT PROBLEM ARE WE TRYING TO SOLVE?” Basic Thinking, Mindset, Assumptions Basic Thinking, Mindset, Assumptions That drive this transformation BehaviorsMANAGEMENTSYSTEM Lean Transformation

Transformation Questions 1.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 Questions 1.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 Questions 1.What is our purpose or what problem are we trying to solve, what value to create? WHAT is our PURPOSE? What situational problem do 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 Process Breaking Down Company Problems and Solving Them at Each Level 21 Company- Level Division-Level Hoshin Group/Individual Problem Solving Breakdown of Hoshin Individual Contribution Sustained high performance Employee Motivation

Purpose/Problem At Each Level Each person with responsibility for his or her situational problem to solve!

Transformation Questions 1.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 problem do we need to address? How to improve the work?

Process Improvement… What is the work to be done in 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 Questions 1.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 problem do 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 Capability Development “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… t PDCA LEARNING CYCLES

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 t PDCA LEARNING CYCLES

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 Questions 1.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 problem do 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 Capability - at the SAME TIME!  Begin with Yourself!!

Leadership Styles

What leadership behavior and management system do we need? WHAT is our PURPOSE? What situational problem do we need to address? How to improve the work? How to develop the people? What is our BASIC THINKING?? What leader behavior and management system?

Transformation Questions 1.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. 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