Michael Ballé is lean author, executive coach and co-founder of Institut Lean France
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In this engaging theoretical piece, Michael Ballé reminds us how in a Lean organization, relationships are structured around learning opportunities rather than execution. This ultimately allows a company to grow.
After years of studying Lean transformations around the world, we have seen time and again how the implementation of the Lean learning system (the Toyota Production System outside Toyota) leads to five visible results:
Sales improve because quality and delivery improve.
Cash improves because lead times are reduced.
Profitability improves because of less rework and management blunders.
Staff motivation improves because management shows them more respect and involves them more.
Products and services improve because people try to make better products, leading to innovation (improving current technologies) and occasional invention (developing new technology).
With Lean Thinking, the company as a whole is better off. It grows a base of loyal customers that attracts other customers, its people love to work and give the company their all, and as the learning system is implemented more deeply, management moves from solving obvious problems to tackling more demanding, technical ones, which improves the company's technical assets and prepares it for the future - as well as delivering results in the present.
We often wish it were so, but this is not magic. Every company operates in market conditions beyond its control, and markets can have sudden fluctuations. For example, I saw an Italian service company lose all its contracts with major oil companies two years after they decided to divest their own service stations (the company switched to servicing independent companies and ended up doing very well). I have seen the construction market in the Paris area drop dramatically and real estate developers put painful price pressure on construction companies (this was a long crisis, at the end of which the lean company was the only remaining company of its size, because all business had gone to either majors or contractors led by the promoter - the market has turned around and they have now doubled their sales from their lows, but it was a long, hard struggle). And of course, right now I know industrial companies affected by a 20% to 40% increase in material prices, supply shortages and hiring problems.
Lean Thinking, however, helps even with dramatic turnarounds in the marketplace
As sensei Ritsuo Shingo once shared, TPS is very good in normal situations - in abnormal situations, you need to think deeply and be flexible. Lean However, thinking helps even in dramatic turnarounds in the market precisely because people who are used to dealing with problems on a daily basis are better prepared and able to change and make the company more adaptive. For example, a company that sells cars over the Internet has been very successful in selling off the overproduction for manufacturers and investing in becoming a pioneer of the circular economy by refurbishing and reselling used cars. Now, as a result of the chip shortage crisis and other world events, automakers have drastically reduced production and are in a complete refocus on predominantly used cars, which means building refurbishment sites and changing supply chains quickly. Thanks to years of Lean practice, it is doing this successfully. Yet such radical changes are usually messy and difficult.
As we have seen (and this is a second hard truth we mention here), in these perfect storms of the marketplace, the Lean learning system must be constantly fueled by leadership purpose and focus. When the going gets tough, some managers may fall back into panic mode and drop Kaizen efforts. New employees don't understand the Lean culture, and since in a crisis no one takes the time to train them, they abuse the existing Lean tools. In difficult times, leaders themselves often take hasty, on-the-spot actions (sometimes necessary), leaving people demotivated and not thinking about problems and improvement. Even without a crisis, Lean routines can create their own bureaucracy and people are often slow to use them, focusing increasingly on internal problems rather than customer issues: in such scenarios, Lean can cease to be a learning system and become yet another source of bureaucracy and compliance over competence. To yield lasting benefits and "look alive," the learning system must continually put energy into challenging and supporting improvement insights and initiatives.
Yet, with these two caveats in mind - painful market shifts or a lack of leadership purpose - the lean learning system produces better results in every situation, even when conditions are bleak. How does it do that? Years of experience at the gemba teach us that the tools and attitudes of the Lean learning system affect how people think and feel about their work. In a Lean system, they care more about the result for the customer, learn faster to perfect their technique, and engage in teamwork with others to improve coordination in processes. Lean is the only management method that is more concerned with what and how people think about their work than their actual behavior. In this, it clearly distinguishes itself from many Taylorist approaches (often disguised as Lean) with an unhealthy obsession with "standards" and compliance with standards - as opposed to looking at problem solving and kaizen. Standards are an important part of the system, but as an aid to learning, not as a way to program people as if they were machines.
Create learning opportunities with Lean
Lean teaches people to think about their work, their place in the process and the whole system to deliver quality, flexibility and price to customers. Thirty years ago, when I first encountered Lean techniques, the thinking was mostly mechanical: the idea was that you set up the production system right and then good things will follow.
Toyota's experienced sensei have painstakingly tried to move us away from that misinterpretation and teach us that what the Lean system really does is visualize learning opportunities for people to form their own thoughts. In The Thinking Production System, Godefroy Beauvallet, Art Smalley, Durward Sobek and myself describe a typical picture of how Art's Japanese sensei led him to investigate a highly technical problem. His sensei asked him to look at a machine that was producing 2-3% scrap, well above Toyota's standard and something that was completely unacceptable. After sifting through all sorts of data and gaining no insight into the problem, Art was asked to stand in front of the machine for an hour and report back. When he returned no further enlightened, he was then asked to draw the grinding process in detail and list the possible causes of the defects. Using a list of 15 items, he was then asked to come up with a test for each of these potential causes. The first eight tests did not produce a breakthrough, but helped clarify the problem. On the morning of the third day, Art found the solution in the ninth test: the coolant tank was contaminated with bacteria, which had affected the concentration of the solution. This minor problem was enough to cause most of the component failures.
After the problem was finally solved, Art asked his sensei how long it had taken him. The answer was, "About ten minutes." He had encountered this problem in the past and could tell by the smell that it was pollution. So why spend three days investigating causes that were known to be dead ends? The sensei replied, "This way you learned one thing for sure that worked and eight that didn't. If I had told you the answer beforehand, you would have learned eight less things." The Lean learning system creates endless learning opportunities like this. In fact, the whole system of Kanban, boards, 5S and obeya can be seen as a structure of learning opportunities - it's up to people to step up or not.
We are facing a kind of theoretical quagmire here: each of the principles of the TPS changes the working conditions, but not the work itself. The TPS never says "regularly check the coolant tank for contamination." Setting up a store inventory and a kanban launcher creates learning opportunities - such as when the former does not have the parts the next process needs or when the latter has too many cards - but does not touch the work itself. And yet the work is improved. The empty store stock is a learning opportunity. What I have long pondered is how that learning opportunity is created and then seized.
Changing relationships within a company
Learning takes place in the situation Art is currently discussing with his supervisor. Learning requires activating familiar concepts and elaborating into new ideas. It happens especially when the learner is presented with 1) a problematic problem (data shows that the machine is causing malfunctions), 2) a situational interest (supervisor asks him to solve it), 3) self-directed inquiry (listing and testing out possible causes), and 4) a mentor who guides learning (supervisor encourages and directs to explore, not just to provide a quick fix). What is striking about this list of factors that create the conditions for learning is that many of them are relational.
Allow me to put down my 'Lean thinking' cap for a moment and put on my systems thinking cap. Most corporate cultures in Western corporate managerial relationships are based on execution: "You did/do not do this or that." This is evident in relationships between managers and subordinates, but also in interactions between colleagues. Most arguments between colleagues are that one has not delivered what was promised, is not claiming his share of the weight, or is doing things that the other disapproves of. The big shift in lean thinking is the shift from performance to learning: "You did/do not learn this or that." And from that point on, the emphasis on management is very different, because as the lean saying goes, if the student has not learned, the teacher has not learned.
The concrete change brought about by the Lean learning system in the workplace is a change in relational protocols. In sociology, to use a definition by John Padgett, relational protocols are the practices by which people establish (different types of) social relationships, in other words, who talks to whom, about what and how often. The first obvious relational protocol change is for leaders to go to the gemba and discuss problems (rather than for leaders to visit the workplace and expect to be reassured by rosy pictures of Potemkin villages). The second relational protocol that changes Lean Thinking is the interaction between manager and subordinate, as fully described by John Shook in Managing to Learn. As in Art's example, the manager is expected to guide the subordinate to learn through an A3 paper (the space for learning opportunities) and a methodology for problem solving (tutoring scaffolding).
Changing hierarchical relationship protocol also changes the way colleagues interact with each other. For example, Anne-Claire Baschet, Chief Product and Data Officer at Aramis Group, explains how she expects a conversation to go. "Let's first look at the current method (before telling what to do), explain the problem as you see it, and suggest alternative ways to solve it (at least have considered an alternative or if there is only one option, who to talk to, to develop another."
A framework of relational protocols
If we look at the Lean learning system in this light, we see that it is a framework of relational protocols:
Customer satisfaction: measure quality, lead time and cost and seek to improve them. See the opportunity in improving value for customers.
Just-in-time: establish all interactions at a regular pace(branch time) and reduce the number of transfers until all processes are in a continuous flow. Use Kanban and Pull to see detailed opportunities to improve flow.
Jidoka: improve anomaly detection and accelerate management response to anomalies for operator training or machine troubleshooting. See the possibilities in more detailed understanding of manual and machine work.
Heijunka: balancing workload and capacity, smoothing out peaks and valleys and splitting batches into smaller ones. See the opportunity to learn how variations in workload (mura) cause overload (muri) and then fractures (muda) and learn to reduce these variations in workload.
Kaizen: involve operators in looking for pain points in standards to find improvement opportunities. See opportunities to involve people in managing and improving their own work.
Basic stability: learn troubleshooting across the board and practice TPM to ensure equipment works as expected - a necessary stable foundation for work. See opportunities to improve work.
Each of these relational protocol changes is quite profound. For example, when a CEO of a hospital first goes to the gemba to talk directly to the teams and then uses an obeya to have the directors (his direct reports) share their problems and discuss the administrative changes they are considering in their positions, many directors rebel against this unacceptable intrusion into their areas, which they consider their private domain. The relational protocol with the previous CEO consisted of weekly four-hour management meetings in which each director reported good news and tried to blame problems elsewhere. The change in format radically altered the relational protocol, both with the CEO and among the directors themselves - a change that would eventually cause a turning point in their careers.
Changes in relational protocols lead to behavioral changes in managers (when they adapt), but also change promotion and hiring choices (joining a Lean company is particularly difficult because few managers are familiar with Lean relational protocols and, if they do not know the concept, do not understand where/how they are expected to change to fit into the Lean culture). Changes in relational protocols affect careers and as such have a very direct impact on structure, both in terms of accelerating learning and creating resistance among those who do not intend to change how they interact with bosses, subordinates and colleagues.
Theory of Lean transformation
A theory of Lean transformation might then be:
change in relationship protocols -> emphasize learning opportunities -> change in work practices
Such a theoretical framework can also explain the failure of Lean implementations when consultants conduct workshops or training without changing relational protocols. Changes made during workshops or insights gained during training disappear in the face of established working relationship patterns. This approach also explains why successful transformation depends on the CEO's commitment to TPS - relational protocol change begins at the top and spreads through mimesis and training.
Transformation is, well, transformation. The elephant in the transformation literature is: what are we transforming? Scratch the surface, talk about people, and very often you find the old mindset of changing organizations - structures or processes. But what makes Lean so different is not what Toyota veterans have taught us. Indeed, most of the transformations I have been involved in have succeeded without changing the organization in any (or less significant) way - it was mostly about interpreting current structures and procedures, changing from a focus on compliance to one of capability, and from execution to exploration.
Viewing the business through the prism of relational protocols reveals a previously unexplored entry point for transformation. Viewing the elements of TPS as a set of relational protocols designed to highlight learning opportunities creates a useful structure within the company that can be made concrete through visual management. Each visual technique focuses on a specific learning opportunity, but it is the relationships around the visual tool that will encourage people to get up and learn or to flinch and stay put. Lean is about people and people are about relationships.
In The Lean Strategy, Dan Jones, Jacques Chaize, Orry Fiume and I concluded our analysis of the cognitive revolution of Lean by noting that Lean is changing people's relationships with their work. I now believe we should extend this insight to the relationships people have with each other. It may well turn out that the transformation works the other way around: by changing the relational protocols between people, and thus their relationships, lean influences the way people work, emphasizing greater diligence, deeper thinking, improvement experimentation and teamwork (critical elements of successful innovation).
As we used to say in systems thinking: change the relationships, change the behavior. By structuring relationships around opportunities for learning rather than execution, we create organizations where people have room to grow, and by encouraging personal growth, we ultimately achieve business growth.