The secret sauce of lean leadership

Lean Nation,

I have been very blessed in my life.  I have worked for and with many companies.  Some were large and some were small.  Some were publicly traded and some were private.  Some were union and some were non-union.  Some were high tech with new products coming to market and lots of automation and some companies were low tech with lots of labor.  But most importantly, some had great leadership and some had atrocious leadership.  I am now convinced that every job was a stepping stone to something better, even though I couldn't see it at the time.

This is a lean blog, though, and I am pretty sure no one cares about my work history.  But I took two important learning's away from this experience. The signs had always been there, but they were never clear. The signs were solidified about a month ago in a conversation with a 40 year lean veteran.  I asked him what are the keys to creating a culture of improvement .  He said unequivocally the key is leadership.

I asked him to be more specific.  He said leadership needs two skills to be successful at improvement. The first is not a surprise.  He said that leaders need to hold everyone accountable to follow standard work.  This means staff and management.  This means "special" employees like physicians and engineers, and lawyers. And this means leadership like directors, chiefs and vice presidents.

I see in many organizations that the staff is held accountable. But the further you get from the staff,  the less accountability there is.  This creates many problems, but most notably, lack of leadership standard work drives the majority of the waste in the system.

The second leadership skill is the ability to create a tangible vision.  While lean at its most fundamental, is about seeing and eliminating waste, sometimes the entire system is so wasteful, it needs to be totally re-designed.  While many leaders agree with this statement, many fail to act in any meaningful way.  The risk of failing is too great.  The culture change too large. We will upset people.  This has worked in the past. Look how we benchmark....The list goes on.

One way this plays out is the creation  a fuzzy strategy, with unattainable or un-measurable goals. The lower levels of management, in an attempt to meet the strategy, embark on multiple and frequently competing initiatives. This results in limited improvement, poor results, and lots of frustration.

Great lean organizations have a clear vision and strategy.  There is no guessing on the approach, measures or expectations.  And they don't dodge the unpopular issues, sacred cows, or silo-ed organizational structures. There are no untouchable employees.  Everyone participates and every is accountable.  Transformation is the goal.

So looking back on my career and my consulting practice, I can attest that every transformation that failed was because of a gap in one of the two leadership skills. Either the accountability framework was not in place, or leadership did not have the courage to create the correct and clear vision leading to sub-optimal results and no culture change.

How's your transformation going?

Lean Blessings,

Ron

Ron Bercaw
President and Sensei
Breakthrough Horizons Ltd.
www.breakthroughhorizons.com
2 time Shingo award winning author

Are your internal lean experts excelling?

Lean nation,

Today's blog will review an important lesson.  If you have read any of my blogs in the past, your will quickly recognize this theme.  About 1/3 or more of my blogs focus on this topic.  Have you guessed it yet?

Leadership

I was teaching a Master's class at the University of Toronto, and an adjunct this week on healthcare quality improvement.  I had a class of some the best and brightest minds in healthcare including a blend of physicians, clinicians, and administrator's.  It is inspiring that our next generation of healthcare leadership is getting a grounding in lean quality improvement.

This class was an intense course.  4 days of  consecutive lessons.  I prefer teaching in that format since the concepts are progressive in their application and the back to back consistency enables better retention and application of the material.  The questions I received from the class were very interesting and an excellent gauge for what is happening within the healthcare industry.  As least as it relates to the students in the class. And this class was international in their make-up.

Would you be able to guess where the majority of questions came from?   Yes there were thee usual list of questions related to tools and their application.  The concepts students struggled the most with included the following:

• the application of takt time
• properly completing a time observation
• properly completing a loading diagram
• applying the scientific method through the A3, and 
• process control

Ironically, the broader issues with the class were not tool related at all.  There were leadership related.   As we talked through linking lean improvement to corporate strategy, removing the barriers to large scale organizational change,  dealing with accountability issues,  one theme became apparent.  Leadership in these students organizations were unclear of their roles,  or not engaged in the improvement process at the level required to be successful.  

All of the major issues that need to be resolved to transform an organization must be dealt with directly by senior leadership.  This topic dominated the class from the first through the fourth day.  I had to spend a lot of time addressing the leadership aspects of each of the change concepts. More time was spent talking about the tricks to get leadership's attention.

Let's go back to the title of this blog.  Are your lean improvement experts excelling in your organization?  If not,  the problem may not lie with the improvement team, it may lie with leadership.

Lean Blessings:

Ron

Ron Bercaw

President and Sensei

Breakthrough Horizons Ltd

www.breakthroughhorizons.com

Shingo award winning author

Directly Linking Improvement to Strategy

Lean Nation,

Happy Holidays to everyone!  As the holiday season unfolds, I wish everyone a prosperous and safe holiday season, and happy New year!  If you have worked hard to eliminate non-value added activity from your processes,  hopefully 2013 was full of many great surprises of improved quality, shorter lead-times, and improved productivity for your organization.  If you have yet to get started on your improvement journey, great things await you in 2014!

In my travels this December,  ran into a situation I frequently see within organizations. Many organizations have some form of improvement capability.  They have trained personnel with some basic understanding of tools and the application of the tools.  Less frequently, they might also have engaged leadership with a desire to change culture and improve. Both of these ingredients are important to delivering sustainable results.   However most organizations are hand-cuffed because of one critical leadership flaw. That flaw would be lack of focus.

One of the biggest problems I see in many, many, many..... organizations is they try to accomplish way too much. Leadership has failed to separate the many good ideas and initiatives from the critical few.  The specific lean approach to developing and deploying strategic initiatives is known as Hoshin Kanri, also known as policy deployment or strategy deployment.   This process delivers the critical few breakthrough objectives and provides a framework for developing, refining, deploying, and managing the organization to the delivery of breakthrough objectives directly derived from the strategic plan.  

There are many places to research Hoshin Kanri and several outstanding books are written on the topic. So I am not going to talk about strategy deployment in this blog. Others do a better job of speaking about the process and its benefits.  

Should your organization wish to pursue the process of Hoshin Kanri route, however, be warned.  If you are not willing to totally unwind your current strategic planning process, along with the corresponding operational and financial review processes,  then I would not take on Hoshin Kanri.  If you do, you will be managing two systems and the new one loses every single time. There is no hybrid approach that works effectively.  Either follow Hoshin Kanri standard work or don't,  but being half in and half out will be ineffective 

Now back to my blog content.  Specifically, the organization I was working with had several hundred trained improvement specialists.  Almost all of these personnel were part- time improvement people holding other full time jobs, but none-the-less this group had more than enough capacity to move some big dots. As a general rule, this multi-site organization had leadership committed to resourcing projects.

The challenge was that the organization has over 150 key measures to deliver improvement on. No one could articulate what the measures were, which were important, how they were measured.  So each team targeted a different measure or measures and although pockets of improvement existed,  no meaningful outcomes were generated. Why? Because there was never enough critical mass on anyone single focus to move a big dot. The work was scattered and diffused.  Teams were fighting for the same resources like IT and supply chain. And managers and leaders were constantly bickering over which project was more important. All of these activities are 100% waste. 

This is a self inflicted leadership wound.  I believe the single most important thing leadership can do is determine the priorities and focus of the organization.  Asking people to focus on, improve, and report on 150 items is criminal. (By the way, the second most important think leadership can do is hire the right people to do the work).

So the question is how many priorities should there be?  A world class organization has a total of 3-7 top level priorities. A lean organization will typically have 5 areas of focus. These areas of focus are directly aligned to true north measures.  True north measures point to the top level outcomes that the organization aspires to obtain that would lead to breakthrough performance as viewed by their customers. As a refresher, the true north measures include dimensions of Quality, Delivery, Cost, and Growth and since nothing happens without people,  another dimension, Human Development is added to the list.

The task of taking an organization from 150 areas of focus to 7 would be daunting and likely impossible in the first attempt.  Getting from 150 to 20 in the first pass might be possible and takes the organization quite a bit closer to their goal of 5-7.

Great organizations excel and move big dots because leadership clearly articulates and resources the critical few breakthrough strategies, provides oversight for their execution and takes quick interventions when things go off track.  This is how you directly link team level improvement to strategy.

Lean Blessings,

Ron

Ron Bercaw

President and Sensei

Breakthrough Horizons Ltd

www.breakthroughhorizons.com

Shingo Award winning author

Lean Leadership - Governance

Lean Nation,

Continuing on our leadership series, this week's post will focus on governance.    There are two levels of governance that should be addressed when trying to transform your organization; enterprise and value stream.  Let's discuss each in turn.

Enterprise Wide Transformation Governance

To effectively implement the Toyota Production System across the enterprise you need an effective steering committee.  The steering committee should be comprised of the key change agents across the organization.  This powerful guiding coalition can come from management and staff.   I recommend about 10 people to particpate on the committee. The enterprise steering committe is responsible for at least eight main areas.

1. managing the pace of change
2. selecting the right areas of focus
3. ensuring value stream improvement
4. ensuring standard work is followed for improvement
5. managing the communication plan
6. developing people (improvement capabilities of the organization)
7. managing the improvement measures (process and outcomes)
8. removing corporate barriers

Value Stream Governance

Each value stream will need to have a governance structure.  The value stream makeup will consist of the value stream manager, the key process owners, and support process owners, along with key leadership from staff.  This committee, is much smaller and may only include 3-5 people. I like to have the primary lean lead resource as a part of this team as well.  The value stream governance will be responsible for the following:

1. managing the value stream improvement plan (priorities and intensity)
2. ensuring everyone in the value stream is particpating in improvement
3. ensure improvements are sustained
4. ensure improvements are sustained
5. ensure improvements are sustained (get the picture)
6. follow up on variances from the visual management system
7. ensure resources are allocated to localize improvement
8. hold staff accountible to standard work

If you are not getting the results you are expecting from your improvement efforts,  check your governance structure.  If you are not providing effective (or any) goverance to your improvement efforts,  you likely are skipping some important steps in the transformation process leading to spotty and un-sutained results.

Lean Blessings,

Ron

Ron Bercaw
President, Breakthrough Horizons
www.breakthroughhorizons.com