If you only have time to read one book about Lean Management, it has to be this one. This is a profound and thorough book about the inner secret of Lean Management. Not to say that classics such as Lean Thinking or The Toyota Way are not great essays, but in my opinion, none has succeeded in capturing the gist of the Lean philosophy and in describing it so well. Thank you so much Steve Bell for recommending this book.
While using as a starting point a study by Steven Spear published in the Harvard Business Review (Decoding Toyota Production System), Mike Rother’s does a wonderful job in describing the inner mechanisms behind Lean Management. Just like Michael Ballé [FR], Mike Rother puts management at the very heart of the approach which boils down to three core practices …
Managing 21st century organisations with 1920’s management methods
Mike Rother is fully aligned with Gary Hamel Future of Management’s statement about the way we manage organisations today :
For many of us today, the way we currently manage our companies is built on logic that originated in the conditions faced by companies in the US automobile industry during the late 20s. If our business philosophy and management approach do not include constant adaptiveness and improvement, then companies and their leaders can get stuck in patterns that grow less and less applicable in changing circumstances.
In the organisation in an Institutional life state, as William Bridge defines it,
The unspoken business philosophy is about exercising rank and privilege and thus avoiding mistakes, hiding problems, and getting promoted which becomes more important than performance, achievement and continuous improvement.
How to make organisations adaptive ?
This is this core question that Lean addresses : how to make organisations adaptive in times of constant change ? Lean proposition is to empower people via teaching and coaching so that all employees are available to identify problems at the earliest stage and solve them using a scientific method (hypothesis, experiment, measure, decide).
Data Vs Gemba
The wrong assumptions in today’s organisation is that, based on data, managers in their office are able to develop a realist plan. First, as Robert Austin reports, data can be gamed which makes Management by Objectives not very virtuous :
The evidence is mounting that by themselves, management by Objectives at least as we currently practice it and formulaic decision-making do not make an organisation sufficiently adaptive and continuously improving for long-term survival in highly competitive markets.
Data only tells so much about what is actually happening. Therefore Lean really requires people making plans and taking decisions to base these according to what they actually observe on the actual place where work is carried out (the Gemba).
The Toyota Kata
As Michael Ballé reminded #hypertextual [FR], Lean means permanent change through continuous improvement. Processes never are good enough. They are improved through the improvement Kata which answers the following questions: How should this process operate ? What is the intended normal pattern ? What situation do we want to have in place at a specific point in time in the future ? Where do we want to be next ?
It is formalized with the following steps :
- Define the target condition
- Understand the actual condition now
- Identify the first obstacles preventing us from reaching the target condition
- Identify the next step
- Understand what we can go and see we have learned from taking the step
Between the current and target conditions there is a gray zone no one knows about. The wisdom of Lean is to acknowledge this ignorance and resist the temptation of setting a plan. Rather the approach consists in proceeding towards the target condition step by step, removing obstacles and problems one by one, anticipating that as we proceed toward the target condition, new obstacles will appear along the way, obstacles you can’t think about beforehand and that will ruin your plan.
Lean is all about practice and the way to instill the improvement Kata in the culture it has to become behaviour routines.
Problems as the source of continuous improvement
In Toyota, problems are not an embarrassing issue which is a source of blame and shame. It is an opportunity to improve and learn. To such extent that for Toyota, no problem is a problem as there is no more opportunity to improve. And Toyota has a wonderful tool to regulate problems emergence : Kanban. While moving to the one-piece-flow, the Graal of pull flow process, limiting the Work in Progress in progress allows to tighten the process and have new problems appearing.
- Pick-up the problem
- Grasp the situation (go and see)
- Investigates causes
- Develop and test counter-measure (one by one)
It seems a heavy process however the great thing about tackling problems as they appear, they are still small and simple and PDCA can be carried out in very short iterations. Tackling problems as they appear means launching the PDCA process on the spot.
Toyota is not more successful than other companies because Toyota people have greater discipline to stick with a plan or experience fewer problems. Rather they spot problem at the process level much earlier when the problems are still small and you can understand them and do something about them. Their success is not due to sudden innovation but about the ability to execute more effectively in the face of unforeseeable obstacles and difficulties. (…) Costs and quality improvements are made in small steps and take considerable time to achieve and accumulate. Relying on periodic improvements and innovations alone – only improving whane we make a special effort or campaign – conceals a system that is static and vulnerable.
The Coaching Kata
Toyota has long considered its ability to permanently resolve problems and then improve stable processes as one of company competitive’s advantage.
This can only be carried out if the improvement Kata knowledge has been spread out all levels of the organisation.
It is the responsibility of managers to teach this improvement Kata to their team. This is carried out through a mentor / mentee iterative process based on the A-3 document. In other words, coaching and A3 are what allow to scale improvement process to the entire organisation.
Managers are extremely important in Lean organisations. Not only for the teaching dimension of their role but also for walking the talk :
The way the majority of managers and leaders behave will determine how people in the organisation act and thus determine the organisation culture. If senior managers don’t go first in personally practicing and learning the improvement kata, then it is unlikely that they will be able to effectively enlist mobilize and guide those managers and leaders toward the desired behavior pattern. The kind of cultural shift we are talking about cannot be delegated by the senior leaders.
Improvement Kata, Coaching Kata and PDCA
So this is the core of Lean : an improvement Kata (a practice and behaviour) for the company to improve on a permanent basis. Then there is PDCA which allows to solve problems and build knowledge using a scientific methods based on facts (which makes it very difficult for politics to drive the processes).
Lastly there is the coaching Kata which put managers at the core of the process as teachers and in charge of scaling the improvement Kata to all the employees. While learning and solving problems, teams engage and make the company adaptive.
A strongly recommended read.