Lean India Summit 2014 Transformational Lean Leadership John Shook Lean Enterprise Institute Lean Global Network September 2014 © Copyright Lean Enterprise Institute. Lean Enterprise Institute and the leaper image are registered trademarks of Lean Enterprise Institute, Inc.

Understanding Lean Transformation Aligning: Purpose Process People to create value

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

What is the role of leaders in a lean transformation? I frequently hear… “I can’t get my people to do this. How can I get people to do this…?” How to reply…? 5 john shook

Change – the leader’s role… “How can you get others to “do this”…? Only one way…

Lean Leadership …is obviously different from the old command and control dictator. It is equally different from the commonly accepted notion of the “enlightened modern manager”.

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But, What IS “Leadership” Anyway?? And where does it fit in with organizational and personal CHANGE or “transformation”?

What IS “Leadership” anyway?? “The greatest leaders of the 20th century were Hitler, Stalin and Mao: If that is “leadership”, I want nothing to do with it.” - Peter Drucker

Practice of Leadership Lean Leadership Practice of Leadership vs Exercise of Power “I could put a loaded gun to your head…” True leadership exists when people follow when they don’t have to…” - James MacGregor Burns Types of lean leadership- kaizen and kaikaku too

Lean is Personal and Organizational New United Motor Manufacturing, Inc. – NUMMI – built its first car in December 1984 and its last in April 2010.

A Transformation Story: Toyota and General Motors

The Worst Factory in the World… Certified Worst!

From the Worst to the Best… Certified!

NUMMI and the Role of Leadership Graphics slide. Place graphic within the white box.

Four lessons in leadership from NUMMI: “Establish mutual trust” “No problem is problem” “Lead as if you have no power” “Before you build cars, build people”

Solving Problems at the Gemba No Problem is a Problem Solving Problems at the Gemba HERE! NOT HERE GEMBA Data Analysis Room DATA ! WORK FLOW TOOLS DEFECT!!

Kan Higashi to Gary Convis… (NUMMI’s senior Japanese and American leaders) “Lead the organization as if you have no power."

Practice of Leadership Lean Leadership Practice of Leadership vs Exercise of Power “I could put a loaded gun to your head… True leadership exists when people follow when they don’t have to…” - James MacGregor Burns “Lead as if you have no power.” - Kan Higashi to Gary Convis Types of lean leadership- kaizen and kaikaku too john shook John Shook

The Key Factor of Key Factors: Developing People Matt Long of the Herman Miller company: “We aren’t just solving problems… We are developing problem solvers.”

The Twin Responsibilities of a Lean Leader Get the job done and develop your people… and accomplish those at the same time How…?

Lean Management Responsibility vs Authority John Shook * David Verble Lean Management Responsibility vs Authority In my five years in Toyota City, almost never was I given solutions. Yet, I was not free to just do what I wanted. I was given clear responsibility to propose solutions to problems I owned. 21

Ownership of Performance Responsibility vs Authority John Shook * David Verble Ownership of Performance Responsibility vs Authority In a traditional hierarchical organization: Position establishes (or seems to) authority to make decisions. -> In cross-functional organizations, this causes confusion, frustration, and breakdown of the decision-making process. In a Lean Organization: Position establishes responsibility to get decisions made. 21

Making Decisions and Creating Alignment RESPONSIBILITY-BASED AUTHORITY-BASED Focus: Decide the right thing Focus: The right to decide

Lean Management Control with Flexibility This way of managing provides extraordinary focus, direction, “control.” While at the same time providing maximum flexibility. This way of working can resolve the age-old dilemma that encumbers all large organizations: control vs. flexibility.

Change – the leader’s role… “How can you get others to “do this”…? Only one way… The challenge is not “getting other people to do this”… The challenge is getting YOU (and me) to do this!

The Lean Leader’s Challenge John Shook * David Verble The Lean Leader’s Challenge Make objectives, outcomes, assignments clear enough that the subordinate can approach the task with confidence. Yet, open enough that responsibility is not taken away. So the individual doing the work has clear responsibility to propose solutions with a sense of entrepreneurial ownership.  Clear direction with clear ownership 21

The Lean Leadership Challenge Akzo Nobel SCA II December 2011 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!!

Chairman Fujio Cho of Toyota: Three Keys to Lean Leadership Go See. “Sr. Mgmt. must spend time on the front lines.” Ask Why. “Use the “Why?” technique daily.” Show Respect. “Especially the people doing the value-creating work.”

"Lean management is less about providing the right answers than asking the right questions and trying things or encouraging others to try things.

The A3 as a Job Aid for Managers as Coaches

Basic Thinking – Lean Thinking Principle of “Just Enough” Practice of Questioning and Experimenting Structured Questions and Experiments

The A3 as a Job Aid to Ask Good Questions

The Twin Responsibilities of a Lean Leader Get the job done and develop your people… and accomplish those at the same time How…?

Results and Process Manage by Results (MBO/MBA) Manage by Means (Process) - H. Thomas Johnson john shook

“Go See” “Data is of course important, but I place greater emphasis on facts.” -Taiichi Ohno

Measures/KPI “There is no true value of any measurement” (Deming) The map is not the territory (SI Hayakawa) What gets measured gets…

Measures/KPI “There is no true value of any measurement” (Deming) The map is not the territory (SI Hayakawa) What gets measured gets… …GAMED!

Assessment and Feedback Carol Dweck gave different feedback to two groups of test takers. Group A: “You must be really smart at this!” Group B: “You must have worked really hard!” john shook

Praise Results or Praise Effort? “You must be really smart at this!”  Performance worsened! “You must have worked really hard!” Performance steadily improved! A 30% gap emerged john shook

Results and Process GOOD GOOD PROCESS BAD GOOD RESULTS

Results and Process GOOD GOOD PROCESS X BAD GOOD RESULTS

Results and Process GOOD GOOD PROCESS ? ? X BAD GOOD RESULTS

Results and Process GOOD GOOD Potential to improve Lucky! X BAD GOOD

KPI and KSF Key Performance Indicator Key (Critical) Success Factor The objective is what needs to happen The KSF is determined by asking, “what needs to happen for that to happen?” Leaders establish alignment around the vision and key objectives Then break those down into the processes that can deliver on the KSFs. john shook

KPI and KSF Then, break those down into the processes that can deliver on the KSFs… “Process” = The “work to be done”. What needs to be done and HOW to do it. Become obsessive about that. That’s the fun in all this. john shook

NEXT TARGETED CONDITION Leading Through Capability Development Through Collaborative Problem Solving No Problem is a Problem! L E A R N I N G C O L L A B O R A T I V E NEXT TARGETED CONDITION LEARN TO SEE GtS P D C A GtS TARGETED CONDITION P D C A GtS Tools P D C A Tools Gap/Problem/Opportunity Tools CURRENT CONDITION

Off We Go The good news is that you can do this. The other good news is that it is going to be really hard work. The troublesome news is that there is no “roadmap”. (And beware of consultants who want to sell you one!) But – more good news – you are not floating adrift! You have the Lean Transformation Model as your compass, your GPS, to help guide you. john shook