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Embracing the kaizen spirit

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When we emphasize systems and roles but fail to encourage and support kaizen, we cannot expect to tap into the full potential of Lean Thinking as a cognitive revolution.

A story of caring leadership and creativity

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A leader’s creativity and care for her people can lead to extraordinary results even in the most challenging of environments. As the latest LGN book comes out, the author reflects on one of the most impressive lean transformations you will come across.

Pathways to reduce greenhouse emissions

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FEATURE – Imagine targeting a quarter of the world’s greenhouse gas emissions by setting our lean minds to it? The authors discuss building better, circular supply chains and designing sustainable products.

Source – Planet lean

Having fun with lean

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INTERVIEW – As the Lean Global Connection approaches, we learn more about one of the sessions attendees will be able to enjoy and how a game can make lean learning fun.

Is radical quality possible in the tech industry?

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A couple of weeks ago, I was attending a Kaizen workshop that focused on reducing the lead-time for delivering a batch of software features to our customer.

At Sipios, we design and code websites serving organizations in the financial sector. For this specific customer, our team would deliver features to end-users on a weekly basis. The delivery process starts on Thursdays at 12PM, with an expected lead-time of 3 days. However, for the last few deliveries, it ended up taking around twice as long, causing major issues for both our customer and our teams:

  • skipped or delayed deliveries of critical features;
  • waste due to the quality department having to verify every single feature of the application several time at the final inspection stage;
  • frequent interruptions for software developers working on the next features.

The reason for this extended lead-time was quality defects, called bugs in our industry. Not only were there many of them, but I was also surprised to see that teams were not prioritizing fixing and learning from those defects and often preferred working on upcoming features.

That Kaizen session hit me hard, as it helped me realize that, as a CTO, I was not creating a culture of “Quality First” in the company.

Coincidentally, I had just heard about Sadao Nomura and his Dantotsu method, the radical approach to quality improvement described in his book The Toyota Way of Dantotsu Radical Quality Improvement. Dantotsu allowed Nomura-san to achieve exceptional results in all the Toyota Material Handling factories he supported.

For us in the digital industry, the Dantotsu approach can be compared to Extreme Programming, a set of techniques used to achieve low levels of defects when writing software. As I read Nomura’s book, I got increasingly enthusiastic at the prospect of trying this method at Sipios.

In this article, I’d like to share the main lessons I learned from reading the book and how, in my mind, these can apply to the tech industry.

THE 8-STEP PROCEDURE TO PREVENT DEFECTS RECURRENCE

Simply speaking, applying Nomura’s 8-step method means to take every quality defect occurring in manufacturing through a full PDCA cycle in just 24 hours. As Nomura-san says: “Speed is the key.” In practice, this means that to fix a problem, root-cause analysis has to be performed, the identified countermeasure deployed, and horizontal deployment initiated swiftly through collaboration with the Quality Assurance function.

This is very different to the typical approach that exists in the tech industry, in which:

  • only high-impact defects (those, for example, causing website outage or preventing the end user from performing basic tasks on the website) are given a thorough analysis, called a Post Mortem;
  • post mortems don’t include a root-cause analysis and never result in the identification of skill that is missing from the team and that caused the problem in the first place. The countermeasures will usually strengthen inspection by adding automated testing steps to avoid the bug from outflowing again to customers, but they will rarely trigger the creation of a standard or training for software engineers;
  • post mortems define long-term countermeasures that are typically executed in the coming days or weeks, but never on the same day.

BUILDING VISUAL MANAGEMENT FOR RADICAL QUALITY

To visualize defects, targets as well as defect-related problem solving exercises, Nomura-san puts a lot of emphasis on visual management. This is to be expected in a lean book, but two elements really struck me. First of all, the fact that the computers are not allowed and defects are always analyzed physically, notably on a Quality Management board. Secondly, the way defects are divided into two categories – those coming from manufacturing and those coming from the technical department.

Once again, the tech industry does this in a very different way:

  • bugs are usually tracked using software like as Jira or Trello – the same tools tech teams use to manage feature development tasks;
  • There is no clear separation between engineering and production, even though there are great benefits to be reaped from distinguishing between coding mistakes and software design mistakes (like wrong specifications, defective architecture or choices in technologies).

PREVENTING DEFECTS FOR NEW GENERATIONS OF PRODUCTS

A challenge Nomura-san faced was defect prevention at a time when production of a new forklift model began. At this point in the book, one would assume that quality is always the priority, regardless of deadlines. Instead, Nomura explains how launching mass production of a new model should take 24 months and that the deadline cannot be missed.

The described strategy to achieve this focuses on prevention, to avoid as much as possible detecting defects during mass production or, worse, when the vehicle reaches the market and is in the hands of the end-user.

Nomura introduced Simultaneous Engineering Manuals (SE Manuals) for incorporating learnings from previously introduced models (VA/VE), including manufacturing constraints. This allowed the teams he supported to catch more and more defects at the design stage of the new model.

In the tech industry, too, many defects are only found once a new website is released. They are usually the same type of defect for each new website launch: servers not properly configured, missing edge cases due to rushing the work to meet a deadline, or failing to handle a high-than-expected number of end users visiting the website.

The application of SE Manual is not easy to translate into measures we can adopt in the tech industry, but if we look at VA/VE we can say we should focus on:

  • identifying the sections of the code where bugs are prevalent. This likely means that the features behind it are complex and should be either automated or avoided in future generations of products;
  • taking into account features that are already built in other websites, ideally reusing code whose quality is already “tested and certified”;
  • creating more standards, especially relating to the release of a new website.

In conclusion, I consider Nomura’s method a game changer. It teaches us that there is no shortcut to reach high levels of quality. As a CTO, this makes me want to raise the quality bar in the whole tech industry, where bugs are viewed as unavoidable time wasters. “Zero bugs” is the true way to go!

My team and I have already started to build visual management to try out Dantotsu at Sipios. I am hoping to be able to write a follow-up article soon to share with you the results we are trying to achieve.

Creating Toyota cultures around the world

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“Furuta-san is a monster.” That’s what my boss at Toyota said to me after a meeting with Kiyoshi “Nate” Furuta in late 1983. We had been in a planning meeting during the earliest stages of what would later become known as NUMMI (New United Motor Manufacturing Inc.), the company’s joint venture with General Motors. Nate was in charge of key pieces, such as the Toyota way of working, human resources, and labor relations.

In subsequent years, the Toyota Production System (TPS), then lean thinking, and then the Toyota Way would become famous. Over the ensuing decades, most pieces of the system would become well understood by many, even as the means by which to apply the pieces in diverse, real-world settings would remain elusive to most.

Culture is often tossed up as a catch-all concept for everything in an organization that can’t be quantified or easily explained in mechanical terms. But using a compelling term, such as “culture,” doesn’t solve anything unless we can break it down into concrete, actionable terms. To build a strong organizational culture, nothing is more central than the pieces Nate oversaw at NUMMI: the Toyota way of working, human resources, and labor relations (NUMMI was a union shop).

Human resource management (HRM), including labor relations, is often considered a pain-in-the-ass afterthought, a job for people who can’t do anything more important, or a mysterious black box of unnecessary complex and arcane policies and procedures. Not so in Toyota’s system.

Lucky for us all, Nate has authored the book (co-published by the Lean Global Network and Taylor & Francis CRC/Productivity Press) Welcome Problems, Find Success: Creating Toyota Cultures Around the World. In it, Nate takes you along as he and others lead Toyota’s intense globalization, from the early 1980s to recent days. He will introduce you to famous characters, like Taiichi Ohno and Fujio Cho, and lesser-known executives, like Kenzo Tamai, the head of the company’s HRM function in the 1980s. Explaining the central role of HRM, Mr. Tamai told me,

“Human Resources is so important, we can say ‘no’ even to the president. Our policies and thinking are fundamental to the company’s culture, so they shouldn’t be altered easily based simply on any one person’s opinion or wish of the moment. It takes five years to truly understand the effect of a change in basic HR policy. If our values, such as respecting the humanity of each employee, are held sincerely, we need to be conservative about changing policies until we learn their impact. But don’t misunderstand: HR is not the point. We aren’t here to be a good at HR; we are here to sell better cars to more people.”

To me and many others to follow, this was an example of the kind of Toyota thinking that flew in the face of conventional wisdom and, like holding two opposing thoughts together at once, characterized the deep thinking that lay underneath every decision of the company: to find success, welcome your problems.

This is not a book about HRM policies and procedures. This is a deep dive into the way senior leaders embody deep awareness of HRM matters, developing and executing company strategy while at the same time developing human capability. The role of senior leaders isn’t just a matter of directing the company to achieve objectives; it is a matter of building the capability to achieve those objectives, consistently, and further developing capability as it executes.

Key to this is to develop the awareness, attitude, capability, and practice of identifying problems as progress toward achieving objectives, which is, in fact, attained through steadfastly attacking each problem as it arises. This becomes a self-reinforcing loop of the organization, tapping in to the essence of solving problems while simultaneously developing ever better problem-solving skills and better problem solvers. This loop propels an organization toward meeting its purpose while developing capability.

This is no minor attainment or aspiration. It requires a “revolution in consciousness,” as Ohno put it, and nowhere is the revolution greater than in managers’ attitudes toward problems. Every manager wants success. Does every manager welcome problems? Nate argues that, if managers can learn to welcome problems, they can find paths forward to building organizations capable of the greatest success.

At the meeting that inspired my boss to call Nate a monster, Nate had been, well, not a monster, but forceful – winning arguments by the strength of his knowledge, combined with passion and coupled with vision and a sense of deep responsibility. What my boss meant by “monster” – he used a Japanized English term in the middle of a Japanese conversation and context – was that Nate had powerfully presented a way forward that would not be easy but would lead to success if we faced the uncertain road ahead with a clear vision, held our values sincerely, and adjusted to the twists and turns with open minds, welcoming the problems to come as the ultimate means of learning our way to success.

In this book, Nate will share – for the first time in print – his bold actions and points of view that informed Toyota’s phenomenal success in creating Toyota cultures around the world, beginning with a crazy three-way venture (with General Motors and the UAW) in California, to a wholly-owned, non-union operation in Kentucky, to the complex environment that is the European automobile industry. (Note: There is no actual European automobile industry – the challenges began right there.) Then finally back to the US for some mending, rework, and key innovations.

You will find no road map in the pages of Welcome Problems, Find Success. You will find some guideposts and a great many deep insights to aid you in developing your own organizational culture, inspired by Toyota’s efforts during the company’s period of great globalization. Nate and the book invite you to welcoming the problems that aren’t just in the way, but can lead the way to your organization’s greatest successes.

Words: John Shook, Chairman, Lean Global Network

Lean and agile, how they interact

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We are living in a time of huge changes, characterized by uncertainty and little predictability. Adapting quickly has never been more important than today, and for businesses around the world this often means to embrace and fully leverage the potential of digital tools.

A lot has been said about lean and agile – and their synergies – but for a company facing the prospect of a digital transformation it is still difficult to understand what to do and how. In our mind, while lean helps to solve the right problems, agility supports quick adaptability and the ability to change course whenever necessary. Indeed, the essence of Agile is not to deliver faster, but to make mistakes and learn faster.

WHAT TO DO

Developing new products and services is important for companies that aim to grow, transform, and evolve in a hyper-competitive market. Too often, however, organizations offer products or services that don’t respond to customer needs or desires – a dangerous disconnect that can end up costing a lot of time and effort (not to mention resources).

To avoid this, we recommend using a model based on Design Thinking, Lean Startup and Product Discovery techniques for creating new products and services that are truly oriented towards customer satisfaction.

Such discovery frameworks and methodologies can help an organization to deeply understand the problems and generate truly value-adding solutions. They allow for a deep understanding of customer behaviors, expectations, and desires – for the creation of a better overall experience.

HOW TO DO IT

In the context of the sort of digital transformation we most often observe in companies, we notice an inadequate use of agility that prevents them from achieving the desired results. Simply creating squads won’t make you agile! In the same way, grouping people without giving them autonomy, a multifunctional context to operate in, or the systemic conditions that facilitate decision-making and the direct contact with the customer will create a lot of waste (and even generate invisible silos).

We believe that agile values and principles, when applied with purpose and in their fullness, generate the results we want and the sustainability of a digital transformation. In a structured way, using Lean Thinking as a base, the development of a lean-agile governance will enable the company to become more responsive to market trends, faster in bringing a product to market and in responding to value-oriented, strategic changes.

It’s common to find managers who still work with a traditional, command-and-control approach. This is one of the first things a lean digital transformation, with its strong emphasis on leadership development, strives to address. Leaders are the ones who will be called to disseminate lean across the organization, so it only makes sense that they are the first ones we ask to change.

The foundation of any successful transformation is a simple structure that allows for quick responses to customer changes. Such structure is supported by a leadership team that engages and leads the teams while giving them autonomy and a set of well-defined objectives. This will be informed by the ongoing search for customer value that a lean company has to engage in.

LEAN AND AGILE, TOGETHER

If we look at the concept of Improvement Kata, we see that purpose (1) is always visible to everyone taking part in the journey. To evolve from where you are (2) to the next step (3), you need a solid learning system in place that uses lean techniques (4) and quick learning cycles that rely on the agile methodology.

Being “agile” has never been so popular, and not just in IT – after all, any company who wants to survive needs agility. These days, we are seeing a push towards agile in HR, marketing, administration and, in general, any environment that needs to reinvent itself to respond to market needs faster.

But let’s stop for a second to look at agile more in depth. Where does it come from? In the February of 2001, at a resort in Snowbird, Utah, 17 thinkers, professors, and practitioners influential in the field of software development got together. After a weekend of intense debate, they created the Agile Manifesto, with four key principles:

  • individuals and interactions over processes and tools;
  • working software over comprehensive documentation;
  • customer collaboration over contract negotiation; and.
  • responding to change over following a plan.

We think that, when they look at and decide to adopt the Manifesto, people tend to only focus on the left part of the principles (individuals and interactions, working software, etc), forgetting entirely about the items on the right. However, we shouldn’t forget that the Manifesto uses the word “over” – not the word “instead”. Being agile doesn’t mean to get rid of process altogether. Just “because I am agile”, I won’t replace contracts with post-it notes! We need balance in all things.

AGILITY IS A MEAN, NOT THE END

Whenever you are in doubt on “how perfectly” you are applying a particular tool or executing a certain practice or wonder “how agile” your transformation truly is, consider that purpose always needs to come first. If your organization is adapting at the right speed and moving in the right direction, with happier customers and workers and a healthier business, you are on the right track.

Think of your organization’s journey as a marathon. Now, technically you don’t need sneakers to run one, but – let’s face it – wearing them is much better option than running barefoot. Agile is the same: it doesn’t guarantee better results, but it gives you the tools that maximize your chances of getting them.

The quest for agility is nothing new in companies, but too many still don’t understand its true meaning. Being agile is not necessarily about delivering faster, but about learning faster and adapting faster to our changing purpose. And to become truly agile, you are better off if you combine agile practices with Lean Thinking. Alone, the dynamism afforded to you by agile won’t be enough to turn things around in a sustainable way – that’s where the solid foundation provided by lean comes into play.

Words: Carlos Baldissera, Christopher Thompson, Erasto Meneses, Fábio Trierveiler, and Maria Fernanda Vieira