Retaining talent to make a difference

NOTES FROM THE GEMBA – This French company provides support to the severely disabled, and is currently using lean thinking to limit employee turnover and recruit faster.

Working in home care may be rewarding, in that it contributes to the well-being of sick or disabled people, but it is certainly stressful. This is what I quickly find out, as I walk around the small open-space office of Aloïs with the company’s CEO and founder Arnaud Barde. It is stressful because, first of all, you need to find customers, but also because you need to attract and retain employees for jobs that typically require empathy, professionalism and continuity of service.

Arnaud made the bold move towards home services a few years ago, when he left the restaurant business to start a company that would help severely disabled and elderly people in their own home, seven days a week and often 24 hours a day. The job entails human presence and assistance – for example in taking the patient for a stroll, to the movies, or listening to music, painting, or reading with them – as well as tasks like moving the patient from the bed to an armchair and to the toilet and back, cleaning, dressing, shopping, feeding, ironing and assisting nursing care.

Arnaud founded Aloïs at the end of 2014 (he named it after Aloïs Alzheimer) and launched a lean management strategy for the company in April 2016 after attending a Lean Summit in France. Four years after the founding, Aloïs employs 130 people (of which 80 FTEs) and takes care of 50 customers, most of whom require a minimum of five hours of home assistance each week.

As I walk through the doors on a recent visit, Arnaud greets me with a smile and, to break the ice, I cheerfully ask, “How is the business doing?” Arnaud‘s answer is a bit hesitant. I immediately assume his problem is with customers or sales, and ask him if that is indeed the case. “Oh no,” he says. “That is not our problem. We retain all our customers, and at the moment we have a growth rate of about 20%. Our turnover has grown eightfold since our first full year of operation.”

“What is your problem, then?” I ask, slightly surprised by what I had just heard.

“Our problem this year is that we have to can’t keep up with the requests for help we receive, because we can’t recruit fast enough.”

The hourly price of home care is set by the Departmental Council Healthcare Board (the payer), not by Aloïs. Needless to say, selling a service to disabled people, who have no income other than government support, at a premium is not an option. This constraint, combined with the fact that the job typically doesn’t require a high level of training and education, results in employees being paid rather low wages. At the same time, this is a demanding job. Add to the mix a recent upturn in employment offer in France and the traditionally high turnover of employees in home care services, and you will easily see why Aloïs is struggling: despite some improvement over time, employees leave regularly and recruitment remains difficult. This, in turn, puts a lot of pressure on remaining staff.

The story of these improvements and difficulties can be read on a very extensive system of visual management boards that the company deploys. Key indicators show customer satisfaction rates, the number of new patients joining, the number of those Aloïs no longer serves (most unfortunately due to their passing), continuity of service (the worst month this year in Aloïs was 99,6%), customer claims, employee turnover and recruitments, hours “sold”, and so on. And that’s before we even get to problem solving and task tracking sheets.

The company tracks customer KPIs

The company’s management team is small, and often out in the field supporting employees in their tasks or training them. However, they try to collaborate by participating in a weekly discussion on problems and a “daily checkpoint”, together with Arnaud.

It is great to see the strategic double challenge defined by Arnaud at the beginning of my visit underlying all the data displayed on the walls, which is centered around two main questions:

  • How do we attract and retain customers?
  • How do we attract and retain employees, so that they can better serve our customers?

OUT TO MEET THE CUSTOMERS

Word of mouth plays a huge role in this business, and providing a good service and finding a clear differentiator can quickly attract new patients. Arnaud has a very clear idea of what sets Aloïs apart from the 220 or so competitors operating in the area: even though the company started with the idea of providing home care to seniors, it quickly veered towards severely disabled individuals needing high levels of care. According to Arnaud, this is a niche in which Aloïs can offer top-level service that other, more generalist competitors can’t provide. Aloïs also offers a nursing service for tracheotomized patients, for which 50 members of staff have been trained. (A capability rarely available to their competitors, certainly in such numbers.)

But there is more. Taking inspiration from the lean idea of going to see, Arnaud has begun to schedule two-hour gemba sessions with every single Aloïs patient in their own home once a quarter. Upon mentioning this, Arnaud pulls a bundle of one-sheet reports from his drawer to show me how these gemba visits happen. During each visit, the patient and her family are very thoroughly listened to, both when they share positive feedback and when they raise a problem, lodge a complaint or suggest an improvement.

“Sometimes, I am also allowed to observe operations like lifting the patient from the bed or dressing them, but people are often unwilling to share this kind of intimacy with someone they don’t know well, which is understandable. When this happens, however, it is the best opportunity I get to detect the pains and constraints we create for them,” he tells me. This, at least in my experience, is unheard of in the world of home care – and probably in most businesses.

This attention to detail is further pursued with employees taking turns in caring for patients, as work standards (how to move a patient, for example) are defined, discussed, improved and logged for each patient. The idea is to offer a perfect service, approved by the patient, but also to enable an efficient induction should a new caregiver step in. Some of the work standards we check on my visit state the “why”, but Arnaud tells me they all should. He is right. In my experience, the why on work standards is very important: when I coach problem solving, I see numerous cases where the problem is actually lost know-how. Complex tasks spelled out on a work standard will progressively be bypassed because nobody remembers why you need them, and this invariably results in increased failures and wastes. Some people in the company knew how to do it at some point, and why it was necessary, but as the job was handed over to others and no one worked on the design to eliminate those awkward tasks, the message was forgotten.

On the topic of hand-overs, Arnaud asked his teams to develop a very thorough training protocol for the onboarding of an employee to a new patient, where the group leader will supervise all the tasks and gestures required for that patient, before leaving the employee on her own. One of the scores provided by the patient is about how serene and trustful they feel with the Aloïs employee. Arnaud remembers a quarterly visit during which he saw the patient, a severely disabled man in his thirties, fall asleep with the caregiver’s hand resting on his head. “What’s more serene than that?” he remembers thinking.

Care is important for the well-being of patients, but so are the stimuli coming from social life. This is an important extra offered by Aloïs, which, beyond home activities, arranges a quarterly event for all patients and their caregivers, with activities ranging from theater to karaoke, a wine tour of Bordeaux to chocolate making.

Aloïs measures participation to social events

In mid-2017, Arnaud was advised to check whether this ambitious service approach would not severely impact his margin. But he sees things the other way around: his hunch is that he should work on the quality of service first and the rest will follow. He was right: at the end of the year, profitability was double the expected level. As mentioned before, this strategy of differentiation pays off, and growth is certainly not an issue for Aloïs!


BOOST TRUST, INCREASE RETENTION

At this point of my visit, Arnaud and I walk to another set of visual management boards, where we engage in a long conversation over the problem of attracting and retaining talent.

Recruitment has been a headache recently, for a variety of reasons. New hires are needed both to grow (it may take up to six caregivers taking turns to assist a patient day and night, not to mention backups) and to replace those who leave.

As we talk, I draft on a piece of paper the causal model of the hassle:

Causal model recruitment problems - part 1

But recruiting is not so easy: between the upturn in the French employment market and the fact that Aloïs is not well known yet, the company cannot rely on a database of potential candidates.

Causal model recruitment problems - part 2

In this scenario, you have two options (none of them ideal): either growth stops or Aloïs staff will find themselves struggling with continuity of service for 24/7 patients – not to mention stand-by services on others – with the risk of straining scarce resources and generating even more turnover or absenteeism.

Causal model recruitment problems - part 3

Arnaud confirms the three steps he has taken with his teams to try and address the issue: “We brainstormed how we could build a solid database of potential prospects for recruitment, in addition to the very strong partnership we have develop with the local unemployment agency [which includes a 10-week course, mostly taking place at the gemba]. And we defined a takt time to complete the tasks to build it. We now track our achievements against the takt time.” Seeing an office task work at takt time, with weekly discussions on what is late and why, is a rare opportunity that I gladly jump at.

Studying the efficient collection of CVs

“Secondly,” continues Arnaud, “we have tried to speed up our recruitment process. September saw a relief after two or three strained months.”

Lastly, and this is the most interesting part, Arnaud and his teams have attempted to address the root causes of the problem (employee turnover and absenteeism). Backache is a serious concern there and stems from the fact that patients are sometimes reluctant to use a complicated and rather humiliating piece of equipment for lifting patients. They are simply unaware of the strain this puts on the caregivers. Arnaud is contemplating an investment in ergoskeletons, similar to exoskeletons but lighter and great to transfer the strength of the legs into the upper body. Another issue that creates absenteeism is recurrent illnesses, such as gastroenteritis: the caregivers cannot come close to patients suffering from this condition, so it is important for Aloïs to find ways to avoid contagion.

Another key point is convincing caregivers to accept being on call. They find it stressful and poorly paid. More generally, as we discuss with Arnaud, the problem is that the 120 or so caregivers at Aloïs are only supervised by six group leaders – in other words, 20 persons for one group leader. Taking into account the quarterly visits to patients, the recruitment and induction of new caregivers, this leaves little time for kaizen, improving standards, daily checkpoints and occasional last-minute replacements. Arnaud is thinking of developing a team of experts to take over on-call requests and start using them with new patients (while new recruits would be assigned to existing patients, where the operating standards are well known and agreed on). Could those experts take over a role of team leaders, supporting teams on the gemba smaller than the current ones? The scheme would offer increased career opportunities for caregivers, thus making a job in home care more attractive.

As we end the tour, Arnaud and I discuss at length what is being done to develop the competence of caregivers. This is another way to address turnover: as caregivers are given more autonomy in carrying out their tasks, and the freedom to improve their standards, their interest for the job will increase. Arnaud gives me two examples: “We ask caregivers – and not group leaders – to define the monthly operating schedule of tasks together with the patient. Also, when we establish the planning for the upcoming month, we take into account their own constraints to adjust the timetable – be it a dentist appointment or two days off to attend a wedding. They feel their needs are taken into consideration now.”

Working in home care is stressful, because of the seriousness of the patients’ conditions, but it pursues a great mission, in that it represents an alternative to a hospital or a nursing home. When I ask Arnaud what made him decide to leave the restaurant business to work in this sector, he takes time to think and then says” “I wanted something with purpose. Something meaningful. It was important for me.”



THE AUTHOR

Catherine Chabiron photograph

Catherine Chabiron is a lean coach and a member of Institut Lean France.

Using lean to gain a competitive advantage

NOTES FROM THE GEMBA – In the web marketing world, a competitive advantage is a matter of life and death for businesses. The author meets a firm that has been leveraging lean to gain one.

Jonathan Vidor started dabbling in digital marketing when he was in high school in the late 90s. He was designing websites at the time and reaching the highest possible number of visitors became a sort of competition among pals. As he tried to increase the number of hits, he learned plenty about the variables that can impact a site visibility and about playing around with keywords (this at a time when the web economy was still in its infancy).

The expertise he developed gave him another idea: through ads and carefully-selected keywords, he could make money by attracting potential clients looking for goods or services via search engines and re-directing them to commercial websites… in exchange for a commission. At 23, he made his first million. By 2004, he had created his digital marketing startup – JVWEB (more info here) – and led it to become a company with a yearly turnover of €10 million and employing 55 people (their average age is 31).

A dream come true.


SCALING UP IN A COMPETITIVE ENVIRONMENT

Like many startups, JVWEB eventually had to scale up. As Jonathan puts in, “we had reached a stage where we could no longer sign up new customers because our teams couldn’t recruit and deliver as fast as sales.” This slowly led Jonathan to turn to lean thinking.

As I reach JVWEB in Montpellier, in the south of France, I wonder how lean can apply to a company selling web marketing services to web platforms: can you imagine anything more intangible than SEO (Search Engine Optimization) services or advice on Google Adwords? I couldn’t! It will actually take quite a few questions, once on site, for me to grasp what JVWEB’s products are. After all, they were mostly invented after I started to work, at a time when the main tools I used where pencils, erasers and, on rare occasions, the only computer on the floor.

What is interesting about JVWEB’s line of business is that the value provided to the customer can often be tracked and measured, as data on the amount of traffic reaching a website before and after an optimization can be accessed easily. In a nutshell, JVWEB’s job is to provide advice to customers on how to become more visible on the Internet, thanks to an intimate understanding of the ever-changing workings of search engines. (The same is true for social networks, although tracking value there is definitely harder).

Though often ignored or underestimated, the capability to recruit, develop and retain talent and knowledge is a key success factor in most businesses, be they industrial or digital. In a fast-changing world in which once-unknown competitors can take over your market share in a heartbeat, it has become a matter of life or death.

This very scenario recently presented itself to JVWEB, which led Sébastien, who is in charge of sales, to dig deeper into his own trade. As Jonathan and I step into the room, Sébastien shows us how he tracks his leads’ conversion rate (face the bad news, if any, as early as possible) and how he checks each step of the conversion process on a big board, measuring the time it takes and highlighting errors or issues.

Interestingly, to understand why JVWEB had lost an offer they thought they had in the pocket, Sébastien managed to get in-depth feedback that helped him unearth the reasons behind the failure. He also got hold of a competitor’s offer, which he then broke down and analyzed in detail. “We have to learn fast what we can improve: are we clear enough? Are we solving the prospect client’s issues and taking care of her expectations? Do we really understand what those expectations are?”

Competitors are not the only threat JVWEB has to worry about: the customer can also decide to hire or develop internal resources to do just what they do (from SEO to recommendations on ads). This means JVWEB teams are often on the edge of their seats, having to define what key competencies they need to develop further and which knowledge gaps they need to address.


MANAGING KNOWLEDGE GAPS IN DELIVERY

Aymerik, who manages two-thirds of JVWEB deliveries with his teams, has dwelled on this problem for a while. “It would take us nine months to fully train new hires,” Aymerik says. “We sort of assumed that they would learn on the job. And when they were eventually trained, we did not pay enough attention to what they still needed to master.” As a result, training has become a key activity for team leaders at JVWEB. Dojo topics have also been defined, from pure technical mastery to how to prepare and manage a call with your customer. The process of onboarding new hires now takes two months. The recruitment process itself has been successfully “kaizened” by Tiffany, the person in charge of HR, both to reduce lead-time and to clarify how to recognize talent and ad-hoc profiles.

Together with Jonathan and two other members of the management team, Aymerik visited Tier-1 and Tier-2 Toyota suppliers in Japan last year. There, the team was struck by the constant attention to details TPS old-timers showed. The trip made them change their minds about the size of their teams and the role of the team leaders. “After we got back from Japan, we went from large 15-people teams to cells of five account managers and one team leader. Half of the team leader’s time is now assigned to dojos, knowledge development of the team, problem solving and support,” confirms Aymerik. The rather invisible work done at JVWEB has now been made more visible, as I can see it in C1 (the first cell). Lucas is the Team Leader there. Visual management boards highlight the rate of customer satisfaction of the week (NPS – Net Promoter Score), but also ongoing kaizen activities and recent dojo learning points.

“The NPS question is a bit too generic”, Valentine, the C2 team leader, comments. “We now prefer a direct exchange with the customer on the activities of the week to try and highlight what could be improved.” The team can now discuss topics, such as the results of the optimizations made the week before, but also the best timing to send over recommendations, since the customer’s web developers’ availability is a prerequisite for triggering a real Just-In-Time process and avoiding a pile-up of unheeded work.

Another addition to JVWEB’s way of working that resulted from lean thinking and the trip to Japan is that all cells now try to implement a detailed production plan and learn from what could not be produced as planned. As we pore over the details of a typical week’s activity to support a customer, it is obvious to me that the teams have taken lean very seriously and that they are trying to create a regular flow, pulled by the daily tasks required by their customers, (where those tasks play the role of Kanban cards). They have not always succeeded at reducing the work content of such tasks below one hour, which means that they may not yet be capable of digging into the details of each piece of work to significantly reduce variability. They have, however, made great progress along the way… and picked up a few quick wins. The SEO team has even designed small daily production cards on which each account manager can write the production plan for the day, and in the adjoining column, the actual production. At the end of the day, they all discuss what they learned from any gap between planned and actual delivery, and what they can do to improve their understanding of the actual work content or the reduction of useless tasks.

Internal kaizen, however, has its limits if you don’t understand what constraints or issues your products or services create for the customer. Jonathan is preparing the next step and wants to organize gemba walks on customer premises, so that the JVWEB teams can observe busy customers running around from meeting to conference calls, with little time to read optimization reports unless they are concise and to the point.


FROM KAIZEN TO COMPETITIVE ADVANTAGE

In what is now a very competitive environment, Jonathan and his team have thought hard about how to regain an “unfair advantage” over their competitors, as Eric Ries labels it in The Lean Startup. To this end, the delivery cells are doing kaizen on day-to-day tasks, focusing on what could not be produced on time or right first time, or what does not match the customer’s expectations. It was a great start, but it might be coming a little late for those kaizen tackling social networks. The team in charge is working hard to catch up.

This is why an R&D team led by Guillaume is assisting the team, taking over whenever tools or reports need to be improved in the delivery. To clarify what they have to do and ensure they do not miss any customer requirement, the team has been working with on a Heijunka Board, levelling up the improvements they have to make for each of the delivery cells over the course of the week.

The board titled “To-do list” is fed by internal-user requests (to clarify the need, the user is systematically challenged with the question: “What is the problem you are trying to solve?”), but also by improvement ideas or kaizen results from the delivery cells or top management. Learning from delivery kaizens and user requests is the very first step towards innovation, because it is a difficult learning process over what works and what does not, what helps customers and what represents a hindrance. The R&D team meets once a month to share the knowledge they have captured this way.

Jonathan and JVWEB know that they need real innovation, not only improvement of what they already offer, to get a competitive advantage, and the R&D team also works on new solutions (one of them being a tool that provides customers with an immediate and automated mapping of the weak points of their advertising campaign on the web).

I start an interesting discussion on the finished products JVWEB sells with Jonathan and his management team. How can they make them visible, palpable like any physical product, so that the teams can step into the customers’ shoes and discuss perceived quality, ergonomics or user-friendliness? How can you discuss kaizen and innovation on products that you can’t see in the collaborative space? Guillaume and his team have stumbled upon this issue and started in a dedicated room a competitive product tear-down (screen copies on the wall), to try and discuss angles and competitive advantages over their own solution. But they have not yet come to the point where their own product hangs on the wall for everyone to see, so that its relevance, reliability and ergonomics can be openly discussed.


DEFINE WHAT WE NEED TO LEARN

In today’s challenging business environment, a company needs efficient and autonomous problem solvers. At the same time, top management needs to move closer to the gemba and help their teams find and face the problems they need to work on. What do the teams need to learn? Where are the knowledge gaps? What are the “critical-to-customer” expectations? Where do they stand there versus the competition? Interestingly, JVWEB has started to work on this very issue in their management Obeya, with a spider chart comparing customer expectations and where they stand at this stage. They have also started to define some challenges and paired the ongoing kaizens with each of them. All teams meet once a month to discuss and confirm those kaizens and define which ones need specific attention.

What we see in Japan from the TPS experts is the obvious part of lean management. Behind visible displays of tools and concepts, the PDCA cycles serve long-term, strategic goals. The find and face phase (as described in The Lean Strategy) has only just started for Jonathan and his teams. What is learned on the gemba and from kaizens will need to be brought up to the management Obeya, and, in turn, Obeya challenges will have to frame the efforts of the teams, so as to build, together with the front line, the solutions that will enable sustainable growth.



THE AUTHOR

Catherine Chabiron photograph

 Catherine Chabiron is a lean coach and member of the Institut Lean France. She previously held the role of Director of IS Governance at Faurecia, a large French industrial group, working for eight years at the heart of the IS department’s lean transformation.

An interview with lean thinking pioneer Freddy Ballé

INTERVIEW – Having started to explore TPS in the mid-1970s, Freddy Ballé is one of the great pioneers of our movement. Here, he shares what he learned about Toyota over the past 40 years.

Interviewee: Freddy Ballé, lean pioneer and author

Interviewer: Catherine Chabiron, lean coach and member of Institut Lean France


Catherine Chabiron: Freddy, you are known worldwide as the co-author of the Gold Mine trilogy, but you are also a lean pioneer in France, having influenced at least two generations of French lean thinkers. Over the past 40 years, you have had developed an impressive track record of lean transformations. What caught your attention and convinced you to start this life-long investigation? 

Freddy Ballé: The starting point was my assignment in Mexico in the early 1970s as Deputy Manager for Renault Mexicana. What struck me back then was the fact that, when faced with quality issues on a car (and we were), the hours we spent on rework exceeded the time we spent on the final assembly. I could sense something was wrong, but could not pinpoint what was at fault in the process. Let’s say this alerted me to Renault quality and made me curious about the existence of other systems.


CC: Where was your first encounter with Toyota and TPS?

FB: You will be surprised to know it was in Africa! In the mid 1970s, one of my colleagues from Renault warned me that an obscure Japanese competitor was dumping prices there and asked for my help to prove this was the case. However, our investigation demonstrated the opposite: not only was Toyota (it was them, indeed) selling cars at lower prices than ours, but they were also making a profit.

At that time, provided a product launch was not underway, we could easily visit a competitor’s plant. When we went to see Toyota’s, we were confronted with a puzzling situation. It was quite obvious that they were far more productive than we were, with one production line delivering 600 cars per day with half the staff we had for the same output and the same type of operation.

Yet, as we walked down the production line, we couldn’t figure out what was different. For example, we would follow a stamping line of door panels through a shopstock, from which the stamped panels were taken to the next step. In Renault, the next step would have been to move allthe door panels to a central warehouse, so it was natural for us to assume that Toyota did it the same way. What we didn’t see during our visit was that door panels were sent directly to the next production step – welding. There was no central warehouse where semi-finished products would wait for days or even weeks.


CC: When did you sense there was something big in there?

FB: Assessing a competitor with your own system in mind is extremely difficult: we simply did not understand what they were doing when looking at their operations with our own set of binoculars. They simply did not focus on the same things. They were obsessed with their work-in-process, stock level and the flexibility necessary to reduce it. They told us, for example, that on the large presses, their SMED was half an hour when ours was five hours minimum. They even gave us a demonstration.

In the same way, at Renault we were measuring output from our lines by the number of cars produced compared to the capacity we had on the line. Toyota was measuring the time the line stopped for quality reasons against the theoretical production time, which gave them a permanent measure of quality.

I was puzzled, but progressively started to get to the idea behind this different way of working: Toyota was targeting flexible production lines to easily switch from one variant to another. They were also learning to work with small batches to reduce the lead-time for customers and enforcing quality checks at each station. (Whenever a defect was detected, the team leader was summoned for help. In case of failure to fix the problem, the line would be stopped!) Things at Renault were different: defects were listed on a piece of paper, but the car would proceed along the line and only at the end would it be taken to a large repair station. There, defects were corrected (provided they had been correctly reported, collected and understood to begin with).

Toyota was also very focused on what we now call “motion kaizen”: to reduce the number of steps and gestures the operator had to perform at his station (any useless motion is a waste). The larger the containers of components along the line, the longer the assembly workstations – and higher the number of steps the operator has to perform. Toyota’s sharp outlook on useless movements led to a switch to small containers.

I have a story about this. Years later, at the time when I had moved to Valeo as Industrial VP, Toyota was eager to penetrate the European market and had therefore developed close relationships with a number of automotive equipment manufacturers in Europe. We received a visit from “the” Toyota TPS expert and I asked the Branch Manager of the plant we visited to participate. Already engaged with a customer, he was extremely reluctant but I insisted he come along to the gemba. Without saying a word, our TPS master walked along the line observing the operators. He then took a small box of clips (used to assemble the car headlights) and moved it by a few centimeters. He then stepped back and observed the operator’s motions again. He moved it a second time, closer to the operator, and eventually appeared satisfied. My Branch Manager took me aside and gave me hell: “You had me postpone an important meeting for a mute old man, whose sole contribution to our production efficiency is to move clip boxes by a few inches!”


CC: Would you say that this paradigm difference in production also stemmed from Toyota’s history? The company had very difficult beginnings, in a small country where mountains often limit the space available for large industrial sites, and with a small domestic market.

FB: Yes, it certainly does. Furthermore, Toyota experienced major quality issues on their very early models and, just as they were ramping up, the Second World War broke. After the conflict, they suffered heavy financial losses and strikes. All of this led them to re-think their approach: “How can we get everyone to worry about quality and work on it all the time?”. This is how they came up with concepts inspired by Edwards Deming like production cells, quality circles and andon.

At Renault, the production line was solely looked at in terms of output. Quality only appeared as a final step. In fact, quality essentially meant managing rework based on a list of problems in upstream processes. In Toyota’s vision, the same production line was conceived as a string of production cells. With five to seven operators, each cell checks its own quality with the clear understanding that operators should stop the entire line if they failed to fix a defect. This way, the defect can’t move to the next workstation.

As time passed, I have seen many versions of a modernized Renault approach: defects are reported in an IT system instead of paper. However, unless they are killed there and then, defects are likely to be overseen and delivered to the customer. From design to assembly, kaizen is key.


CC: What did you learn from Toyota about product design?

FB: The first thing I learned was to pay attention to the customer and how he or she was using our products. You will have heard, like I did, plenty of stories on how Toyota’s Japanese engineers learned from their customers. Getting ready to design the Lexus, they went over to study at close hand representative premium services in the US. Similarly, for six months Honda studied hundreds of families taking kids to school and collecting them, before proposing a new van with rear sliding doors. They had a hard time convincing their Management Board, who feared the van would be identified as a truck instead of a family car. It turned out to be one of their greatest successes.

While I was at Renault, I was involved in the company’s efforts to enter the German market: we improved our designs after spending time watching people getting in or out of cars. This helped us to gain market share there. But I also learned the hard way that things can go the other way. After moving from Valeo to Faurecia, I remember presenting a prototype for our new dashboard to Audi, whose answer was clear: “This is a dashboard for Renault, not for Audi.”

Toyota relies on the role of the Chief Engineer. The CE has customer preferences and constraints in mind at all times. He helps define the product concept and fights for it, while taking into account advice and suggestions from functional experts. We are very far from the classical project manager, whose role tends to be limited to checks on deliverables and reporting on budget and milestones. The first thing the Chief Engineer does – aided by a small team – is to go to the plant producing the current model, discuss with the operators and learn from them about current quality or assembly problems, and work with them on reducing or eliminating them in the new model.

Toyota has also promoted a set-based approach in development. Our R&D departments are still reluctant to study parallel options, which they consider too costly. So, they end up selecting one solution to then discover too late it doesn’t work. This is where the real cost is, because you have to start all over again or launch something with a bug or not at the level expected. With their first Prius electro-magnetic system, for example, Toyota started with 80 potential solutions, tested them, came to an agreement on 40 and then, through further tests, halved those until it could choose one option. One more argument goes in favor of set-based concurrent engineering: the quality of the design typically relies heavily on the designer’s expertise, which this approach enriches through continuous and efficient problem solving.


CC: I heard you say that quality is the starting point of any industrial process and that kaizen is the key to it. Can you share more thoughts on kaizen, please?

FB: As I mentioned before, the key to understanding Toyota’s success is their 5 to 7-strong cells and their team leaders. At Renault, we were checking the actual output against the production plan at the end of the day. Toyota made me realize that a permanent check throughout the day is far more efficient. The part boards objective is by the hour, as is your opportunity to ask why an objective has not been achieved, if necessary. This enables management to see things that could not otherwise be seen, react faster to them, investigate wherever necessary, and collect fresh data. Doing this at the end of the day is too late, because you will have already forgotten what happened in the morning.

At Valeo, we implemented this type of cell, encouraging operators to think about their own tasks and work environment. With limited investment, operators progressively defined very efficient team standards, started to track their safety, follow the takt time on part boards and comment on any gap. When spotted, they displayed the problems and how to solve them. As Valeo grew both organically and through acquisitions, the team cells and their efficient standards made onboarding of small structures much easier.

None of this can work, however, without management at the gemba, checking on quality or gaps versus takt time, supporting initiatives, and asking questions. When management helps solve the problems exposed by the front line, operators gradually become more involved and positive. They also learn to work as a team: they will identify problems together, act together and feel responsible for product quality and takt time.


CC: The team leader is a key role in the organization of the cell. How do you identify those team leaders?

FB: The team leader is a coordinator, not a boss. Expertise on the product and technology is key. A team leader needs his peers to acknowledge this expertise. And yet you might still find you have not made the best choice. Experience taught me that the 5S exercise reveals the best team leaders: during it, those operators who show more ability to see problems and suggest options are not necessarily the person initially earmarked for the job. The right person is often the quiet and reserved one. That you don’t usually hear from.


CC: What about kanbans?

FB: Kanbans give you the takt time, they are the pace maker operators work to.

Kanbans also have unexpected consequences on the assembly line. When visiting Toyota I was particularly struck by their assembly lines. I once asked if they balanced out the workstations on the line taking into account the work content of the operators as we did at Renault. The answer I got was: “Yes, we not only take into account the work content, but also the kanbans”.

It took me some time to understand that this answer was about the components feeding the line. Large batches of similar cars, for example, with the same components (such as air conditioning) could not have worked with kanbans. In Toyota, the lines were replenished using small trains and kanban signals. They used small containers fed by flow racks and regulated by kanbans. This led them to further work on the SMED and redefine the production batch sizes. The kanbans and the replenishment rate directly contributed to the flexibility of the line.

When we started discussing kanbans at Renault, an engineer (who was completely missing the point) suggested to enter the Digital Age and design IT kanbans from the start. I am totally in favor of using computers when they are truly needed and for the added value they bring, but their role should be contained. Cardboard kanbans are strong visual tools that tell you whether you have a problem or not as you walk by. With an IT system, anomalies in the data are only seen by people somewhere in an office, when and if they take the time to check.


CC: How do you explain Toyota’s ability to retain its leading position both in operational efficiency and innovation over time?

FB: In Toyota, kaizen culture explains it all. Worrying about quality and takt time all the time, everywhere, has ingrained the idea that everything can be improved. We all know the story about Ohno’s circle: he would draw a circle on the factory floor using a piece of chalk and keep managers standing there, inside the circle, until they could think of five ideas for improvement.

In the same way, in product development, when you are faced with a difficult problem and someone comes to you and tells you he or she has found a solution, try answering like our engineers were answered while being trained by Toyota: “Not good enough, I want you to come up with three solutions and tell me how to select the best one.” This here is one of Toyota’s strengths.


CC: What would be your advice to CEOs, out of your 40 years of lean experience?

FB: First of all, lean management is built on sand if the vision behind the tools and routines is not properly understood. This is particularly true with Industy 4.0 or Digital factory, amongst the latest fashionable trends in industry. Digital parts boards do not have space for hourly comments on gaps. I am sure the defects recorded online will feed into magnificent Paretos, but the really important thing is actually to prevent passing the defect over to the next workstation, display which problem the cell is working on, and check on the learning progress.

My second point will not come as a surprise considering my experience at Valeo. I would say that implementing kaizen and pulled flows required extreme determination from both the CEO and myself. For most people, small batches and a set-based approach are counter-intuitive. To establish them, you will have to fight preconceptions, which requires will and  the ability to explain why. You also need to dig in the details with your teams, give them a broader view whenever they are stuck, and find new angles with them. I call it the “the helicopter” method: to see where a box of headlight clips should be positioned and, when needed, to step back and be able to check if the flow of the whole line is efficient.

CEOs and managers not only go to the gemba to see things and enforce solutions, but also to learn how to adopt a Socratic line of questioning – not so easy when one has been educated and trained to respond to problems with immediate solutions and tactics.


CC: Socratic questioning?

FB: Learning your way in offices and on the shopfloor, you start seeing problems, waste or unattended issues. Refrain from saying (or even thinking): “That’s stupid, let’s do something about it immediately!” If you want people – whoever they are – to grow, you must encourage them to notice when there is a problem, weigh out options, try out solutions, and learn by doing. Ask questions such as: “Why do it that way?” or “Why is this part lying there?”. With their answers to your questions, help them identify the problem. Add new questions leading them to formulate even more questions, such as “Is there another way to do this?”.

Problem solving is the art of questioning. Whether you start an A3 or any other form of problem solving, the key point is the agreement reached by the team on the question: “What problem are we trying to solve?” Think also of the 5 Why’s: the answer to each should be facts – checked through tests or investigations on the gemba – and not opinions, or even assumptions made by brainstorming in an office.

I have recently started to study Japanese again, and I have discovered by pure chance that shitsu means quality and shitsumon means question. Interesting, isn’t it?



THE INTERVIEWEE

Freddy Ballé photograph

Freddy Ballé started visiting Toyota plants in Japan in the mid-1970s while head of product planning and later manufacturing engineering at Renault, where he worked for 30 years. Upon leaving Renault, he pioneered the full lean system implementation at Valeo as Technical Vice President, then at Sommer-Allibert as CEO, and later at Faurecia as Technical VP. He is co-author with his son Michael of The Gold Mine trilogy.


THE INTERVIEWER

Catherine Chabiron photograph

 Catherine Chabiron is a lean coach and member of the Institut Lean France. She previously held the role of Director of IS Governance at Faurecia, a large French industrial group, working for eight years at the heart of the IS department’s lean transformation.


 

How this SME made lean its strategy for sustainable growth

NOTES FROM THE GEMBA – The author visits an SME specializing in the instalment of electrical equipment. Its CEO has learned that integrating lean in their strategy can lead to sustainable growth.

Words: Catherine Chabiron, lean coach and member of Institut Lean France


As I pay a visit to Grégory Verdon, CEO of Soditel, I decide to try and test, with his help, the concept of the “4 Fs”.

Described in the recently published book The Lean Strategy, the 4 Fs (Find, Face, Frame and Form, as opposed to traditional management’s Define, Decide, Drive and Deal) outline a set of radically different management behaviors that every lean leader should embrace. The idea is for a leader to: apprehend the environment around them by going to the gemba (Find); accept that they might have been wrong on the market, customer expectations, competitors or problems with delivery (Face); support their teams in solving the now-visible problems with flow and quality through a number of lean techniques and tools (Frame); so that everyone can progressively contribute to the construction of a strategy through better, different products and services that help society and respect the environment (Form).

Grégory picks up the concept very quickly and confirms he started as the classic 4D type. He had little experience when he started and simply mimicked the behaviors he saw in other (traditional) managers: he was stern and demanding, never questioned his decisions, and was quick to blame people when something went wrong. More importantly, he would provide solutions to his team, stifling their initiative.

He tells me the story of their CRM, with humour and a good deal of introspection. Back in 2010, he had discovered that a large number of invoices hadn’t been issued and sent to a large customer. True to his 4D approach of the time, he: defined that this was not acceptable and that a rigourous invoicing process with validations and checks was necessary; decided, in 2013, to purchase a CRM software that would support this invoice validation workflow; and drove the implementation. Soditel then entered the deal phase: Grégory’s teams had lost the global vision and only focused on their silos within the CRM, some were overbooked with operational needs and became recurrent bottlenecks in the validation flow, and most started reverting to Excel. Although the CRM was still not completely paid for, Grégory decided to discontinue it after just one year.

“This is when I started my find and face phases. I began to discuss with fellow CEOs and questioned my approach: did it help that I snapped and yelled when something went wrong? Was there a better way?” he recalls.

Soditel initially specialized in the installation of low-voltage equipment – from phones and TV aerials to intercom systems and access badges – in homes, hotels and office buildings. Growing increasingly frustrated with their dependence on other trades, which often prevented them from completing their work, they decided to add high-voltage installations (cabling, plugs, lighting) to their offering in 2013.

“We had an exceptional year in 2011, with the arrival of Digital Terrestrial Television, but otherwise our turnover was always rather stable at just under €3 million,” says Grégory. Soditel is a small business, but collectively, small businesses represent the number one employer in France! Today, the company works on new buildings (low- and high-voltage), low-voltage refurbishments, and aftersales services and maintenance. They don’t design the energy-saving or home-automation solutions they install – they see themselves as an integrator of existing products.

“As we moved into high-voltage installations, I realized I needed guidance on how to manage my business. That’s when I discovered lean thinking. It’s going well, if you consider that our turnover last year was twice as big as that of 2013, and we have learned plenty along the way.”

At this point, I ask Grégory how he integrates lean in his daily life and his strategy, and how he managed his “find and face”.


FIND AND FACE

Grégory takes me to the Sales Administration room, where aftersales customer requests are received. Most customers here are building management agents, acting on behalf of co-owners. Typically, Mr or Mrs Smith will claim they have an issue with the building’s intercom system, and the agent will contact Soditel asking them to go and have a look and requesting a quote. Upon embracing lean thinking, operators began to sit and think with Grégory: a problem that occurred often was that operators always received numerous phone calls or mails from agents enquiring about when a job would that place, even though that job had already been scheduled, if not completed. (The agent is not on site and relies on the information she is given.)

Creating a single mailbox for all incoming requests and deciding that all interventions (or, at least, diagnosis visits) should be scheduled and confirmed on the same day created a major shift: agents in the area had never seen such reactivity, with the number of visits scheduled and confirmed within one day from the request growing from 75% to 95% in 2017. Right now, Soditel is aiming at 2 to 4 hours maximum, depending on the type of assistance.

Most customer complaints in aftersales are related to the poor quality of the solution, but also to the lack of information (remember last time you called for support and were left hanging for days without any hint that someone was working on your case). Taking the hot potato off the agent’s hands within just a few hours is a major relief for them. It also considerably reduced the workload for sales administration operators, as the number of queries and claims decreased.

This “find and face” approach led to more discoveries. For example, Soditel offers contracts of preventive maintenance, and it became clear that all the associated docs left with the customers were highly technical reports that people found hard to read. Possible improvements were not followed up on, either. So, Grégory asked a team leader to look into the problem and find a way to improve things with the team, trying to understand what a “good” preventive visit looks like, building up a standard for visits, and devising more user-friendly reports like the one showed below (a before and after).

After visiting the Sales department, Grégory and I go back to ground level, where logistics are located. Laurent, who is in charge of Logistics and Supplies, seems to have completely grasped the idea of “find and face”. Our of his own initiative, he started discussions with technicians on the road, to understand their jobs and hopefully find ways to make them easier. Most people managing on-the-road technicians are content when they come back and confirm the job is done, whereas Laurent wants them to talk and open up. And open up they did, sharing priceless anecdotes that helped to highlight problems:  “When I started to work, I realized that some parts were missing from the box and had to go back to pick them up” or “We sold three power breakers to the customer as part of the sale bundle, but they only needed two”. All of these conversations got Laurent and Grégory to start thinking about how the work could be improved.

In Soditel, all forms of rework – from re-schedule to re-install and re-turn – are referred to as “RE” and when Grégory asked the team to map it the number of things that popped up was staggering. Next door, we start a discussion with a building site works manager (installing equipment in new buildings), whose team has started to log the “RE”. One of the results was that they launched a checklist on site to highlight what is sold versus what actually needs to be done – a safety check to prevent rework from occurring, as most sales on new sites happen via bid and specs on paper, rather than on technical visits.

This new approach – encouraging everyone to acknowledge the not-right-first-time – paved the way for the “Frame” stage.


FRAME

Once a repair is booked and scheduled, a kit with the requested parts, cabling and necessary tools, is put together in the warehouse. Initially, the kits were placed on a trolley assigned to one technician covering all the jobs scheduled for the day. Determined to understand the reasons behind the “RE” – in this case, the technician not having the right parts for the job – through discussions and observations Laurent unearthed two main causes: first of all, as the days passed and the Sales team refined the schedule, jobs would often be re-assigned to other technicians, but the information wouldn’t reach Logistics and the necessary parts or materials wouldn’t be moved to the trolley of the new technician in charge of the job. In addition, technicians would often forget to pick oversized parts and equipment.

Laurent developed a new solution. As the work is planned, he now opens a kitting box for each job to start on the preparation, thus levelling the effort and visualizing the missing parts as early as possible. If stock is at hand, a green thumb confirms the status (the “eyes” mean that oversized equipment is to be picked up from a dedicated trolley by the technician before he departs). A red thumb signals that the kit is not ready. Kitting boxes are assigned to technicians at the last minute, based on the latest dispatch.

This typical lean approach of kitting a job in the planned sequence is a great example of the Frame stage described by the authors of The Lean Strategy. This is when exposed problems are tackled with the appropriate lean techniques, provided the intent behind each lean tool is well understood.

With the kitting boxes, the intent is to reduce the instances in which there are missing parts and wrong kits by checking ahead of time and assigning kits to technicians on a just-in-time basis, but there is a need to refine the solution further. For example, how will management and operators understand at first glance which kit is in a normal or abnormal condition in terms of delay (a “red thumb” is not critical three days before a job is planned, but it flags a major problem the day before or the day of the job)? Also, how will the whole team learn from the system and improve together?

Despite these open questions, the results of the new approach to creating kits are already very good. The number of checks and questions when organizing for the day’s work has decreased by 3 and internal complaints have disappeared overnight.

I continue to discuss other “framing” topics with Laurent and Grégory. For example, working on pulled flows to stock the high runners (intent: work at takt time, reduce stocks, order only when needed) or “pulling the andon cord” whenever a missing part or a lengthy installation requires an alert (intent: provide an immediate and strong support to fix the problem and make it right first time).

As we go back to the Sales Department, we see another great illustration of framing with lean. As mentioned earlier, Soditel developed a unique market savoir-faire in terms of providing feedback to building agents. But they are also extremely efficient at building-up standard offers when bidded. The result is that they receive masses of requests, but that their order intake remains low. In other words, Soditel is used as a useful reference in bids but doesn’t always retain potential customers. The Sales Manager, also named Laurent, confirms this situation but is torn between the time spent on answers (to avoid disappointing customers) and the need to launch continuous improvement on order-taking. It looks like further framing is needed here.

When we walk out of the office, I discuss with Grégory: do they have to put on the wall each and every ongoing bid or only those on which a decision is expected in the coming weeks to focus the busy teams on those bids only? In other words, how do they implement kanban to highlight the upcoming deadlines? Another frame that could be useful is to define whether Soditel wants to answer all bids, at the risk of a poor intake rate, or answer less bids in a standard manner and focus on the added value that they can bring to a limited number of targeted businesses.


FORM

Grégory is well aware of the fact that, until now, his gemba walks have been mainly focused on support functions. Sure, their work on past-due invoices brought in a big stack of cash. True, trouble-shooting in Sales has helped to identify wrong parameters on a DNS server that prevented messages or offers from being sent to the customers. It’s also true that organizing gemba walks with technicians on the road is complicated, but it is clearly necessary to understand what happens on sites, what problems customers are facing, and which solutions are hard to install or maintain (remember what Jean Baptiste Bouthillon does on his building sites? Check out this Planet Lean article).

Nevertheless, the find and face with technicians or customers started to bring ideas that could make a real difference for the business. For example, most of Soditel’s competitors sell the installation, but few follow up afterwards. Imagine you move into an apartment where home automation was installed by the previous owner: you will certainly struggle to install your own phone with the home automation apps and the lodgings parameters, at a time when you have a million things to do as you try to settle in your new home. This is where Soditel steps in and offers their help to do the set-up and train the new tenant/owner – something few competitors do.

The work on the “RE” will also bring in new opportunities to improve the quality of the delivery, while relieving Soditel’s employees from the mental burden of having to address rework, unclear instructions and customer complaints.

Little by little, as true conditions are revealed and continuous improvement takes place, opportunities for a new strategy for Soditel are being unveiled: what are they good at? What are their competitors doing? Where could they develop a competitive advantage? What do they need to learn further? I believe that lean and the 4Fs will help Grégory to refine Soditel’s strategy going forward, allowing it to continue to deliver sustainable growth (and maybe double the turnover again over the next four years). All in all, Grégory’s management style has undergone a great change, from 4D to 4F, a result of his daily commitment to finding and facing.


THE AUTHOR

Catherine Chabiron photograph

 Catherine Chabiron is a lean coach and member of the Institut Lean France. She previously held the role of Director of IS Governance at Faurecia, a large French industrial group, working for eight years at the heart of the IS department’s lean transformation.