Lead With Lean : Interview With Michael Ballé

michael-netherlands-2014

I have been lucky enough to know Michael for a few years now. I have been that lucky that he has been coaching me on few occasions. This is a huge honor to have such a Lean known figure as a coach.

In all fairness, it can also be quite painful : brutal reality does hurt. Learning is somehow confronting the world, a mess which happens to be much different from the narratives and interpretations that run through our minds. This is why we all need a coach in our thinking process : to make sure we don’t get carried away by our own misconceptions. His last book Lead With Lean is a great help in making our minds clearer about what leadership is in the 21st century.

Michael has made himself available to answer our questions and we are really happy to share this interview here.

o o o

  1. There is this image of leadership as being the inner quality of great people. Yet what this book is about is leadership at all levels, including people doing the work on the shop floor. How would you explain that this “workaday leadership” as you call it in one essay is not more spread throughout the business world?

Workaday leadership is already all around us, everywhere. Janitors show leadership. Waiters show leadership, as well as CEOs. However, we find it difficult to recognize it for what it is because of our images of what “great leaders” should be like: take charge, push forward, no quarter. Still, in real life, we can see that truly great leaders around us, the likes of Nelson Mandela or HH the Dalai Lama have the knack of engaging others, of turning enemies into friends. There are many such leaders in all roles and ranks of society. But we also hold on to the image of leaders as army generals of the 18th or 19th century, giving orders.

The leadership we are raised with (books, movies etc …) is one of giving and taking orders. The Lean leadership we are talking about in Lead With Lean is not having more followers but developing more leaders.

A Lean leader is closer to the captain in a soccer team: “I don’t know what is going to happen during the game but we’ll figure out together.” We need to let go of our “I command, you obey” metaphor to be able to see real leadership all around us. The book is about exploring a different form of leadership, one that is about “this is the way we need to go, how does it look from where you stand, what do you intend to do and how can I help?”

  1. You evoke the paradox of companies that need to get bigger to better serve more customers and that, while doing so, develop the « Big Company Disease”. Could you please elaborate on this disease? What are the symptoms? Can we think of companies, bar Toyota, immune to that disease?

Why would Toyota be immune to this disease? Its genius lies more in recognizing the inevitability of Big Company Disease as you scale–up, and fighting it. Toyota’s leadership know they’ve got it – they’re quite paranoid about it, actually. When you get older you don’t burn up fat as you used to and you put on weight – that’s a fact of life. We all know this. We should exercise and mind what we eat – yet we are fallible. In the same way, when companies grow large, they develop four clear syndromes of Big Company Disease.

The first syndrome is that you start caring more about your internal processes than your customers. The second appears when everybody gets to believe that if only each person did their job well, everything would be fine. Truth is, if people did their job as defined, it wouldn’t work or it would be incredibly expensive, as effectiveness arises from teamwork. We know that innovation and performance come from people’s ability to work together. In companies infected with Big Company Disease, every topic becomes an occasion for internal battles.

Then, the third syndrome is that middle managers put down every person that shows any talent, initiative or simply new ideas. Sure, middle-managers have their reasons, and some of them make sense but it can become a knee jerk reaction. To get engagement, you need to say “yes.” Most companies’ hierarchy focuses on compliance and keeps talented people in narrow roles to keep processes “standardized”, yet in doing so lose the benefit of ingenuity, creativity and sheer energy.

The fourth syndrome is closely related in having difficulties distinguishing legacy technologies (i.e technologies that hold you back) from heritage technologies (i.e. thing that has been working for a long time and should not be touched).  The trick to innovation is to keep the heritage and let go of the legacy (which means you can tell one from the other). Big companies constantly confuse both. They let go heritage and they lock in legacy: as a result, they consistently paint themselves into a corner.

These four syndromes occur in every company, even for Lean companies. The difference is that they know it will happen and Lean is the antidote.

Practicing Lean is like going for a run every day. In building this exercise course that you build up your resistance to Big Company Disease, which gives you a lasting the competitive edge. 

  1. The first Lean value you identify is “Customer Satisfaction over company interest”. Big deal : all companies would share this value, wouldn’t they ?

The difference is that in Lean we mean it. Yesterday, I was on the Gemba with a Lean leader. One of his managers discussed a customer complaining about late parts and explained that the issue would be too expensive to solve. The leader solved it on the spot: put the parts in a taxi, sort out the cost afterwards. In Lean, we see customers as friends that we want to help. Traditional managers think in contractual terms of what we “give” to customers at what “cost” to us – is this how you deal with your friends?

Thinking of customers as friends leads us to delivering a higher quality, more responsive service and, in turn, happy customers don’t squeeze us for every penny on price. It’s a win-win situation that rests on not looking at customers as source of revenues or as cows to be milked, but as friends to be helped. We want to build long term relationships with them so we help them and we try to be smart about it, and they help us in return, surely a better way to do business. In the above example, we pay the exceptional transport right away so that parts arrived in time for the customer. Period. Then we track the costs of extra freight. And then we try to reduce these costs by solving our internal problems, but in the meantime, we still helped our customer.

A fundamental idea of Lean is that human beings are smart but they can also be very short-sighted or narrow-minded.

What we really try to find out is all the silly things we do that stop the process from working naturally and delivering value to the customer.

If the cost is still too high when your process can’t be improved than it could be that you have raise your prices. And your customer-friend will understand it. It’s a matter of doing the job well first.

  1. Another Lean value you mention: facts are preferred to data. How can you explain to a manager that one specific fact has more value that tons of excel reporting?

I don’t mean that data has no value – but facts really matter to put data into perspective. For instance, I’m thinking of a hospital that has 2 MRI machines. Now they need a 3rd one. They’ve looked at the data and it takes 6 days on average to get an MRI scan. However, when you go the unit, you can’t see the queues, and the machines are not that busy – what’s going on? A closer look to the data shows that a few instances have 23 or 30 days wait for some very specific reasons. Most of the time, however, appointments occur within half a day. In actual fact, the third machine was simply unnecessary.

Data is important because it gives you a base rate, but facts help you figure out the meaning of the data. With the US elections we have an example of data that misrepresented reality: all polls showed one candidate as an obvious winner and the other candidate was elected – no matter how “big” data simply missed a building momentum.

To mean something, data needs context. Data itself is not information, data in the context is information. Facts are the context. The information requires the understanding to provide knowledge – again, this is about context and deeper mechanisms that simply won’t show in the data.

Most of our managers are mainly administrators. Somebody put together a briefing, they go into meeting and every stakeholder gives their opinion and preferred solution: it’s all paperwork and horse-trading. Unless they go to the Gemba, to the place where the actual value is created, they have no idea. Every day we see instances of managers happily running large projects, with the best project management techniques and still lead to disastrous outcomes. They’ll say, “hey I followed the process and I did whatever was asked me to do – you can’t blame me.” And then it takes someone really smart to save the day. It’s not about the process, but the understanding. I do think data is important because without a solid base rate notion of how things are we can have very skewed stereotypes but data without context is just as misleading. “Fact is fact,” as one of my sensei often says.

  1. You mention a couple of times in the book Nobel Prize Joseph Stiglitz’s analysis of Toyota strategy: he states that they seek dynamic gains as opposed to static improvements. Where does Stiglitz mention it and what does he really mean by saying so ?

The book I’m thinking of is Creating a Learning Society.Rather than trying to optimize the situation you try to change constantly. Stiglitz doesn’t focus specifically on Toyota but uses Just-in-time as a central illustration of a strategy that was not imposed but that spilled-over within the entire supply chain as suppliers learned. If you look at learning curves as opposed to best practices, you suddenly see the world in a completely different way.

My father, Freddy Ballé came up with the first Lean roadmap to capture all the learning that was happening as a result of supplying Toyota back in the early 1990s, a clear case of spillover. At the time, once they had the roadmaps in hand (I still have the original huge ring binder), they thought: « Now that we have roadmap let’s roll it out » and tried to apply it across the company, cookie-cutter fashion. It simply didn’t work beyond a few obvious low-hanging fruits. No two people follow exactly the same learning path. Roadmaps are interesting when seen as context frameworks, not implementation tools. You need to define with each person their own learning curve. It’s a give-and-take process: where do they want to go? Where do you want them to go? How can that be handled?

I was so excited to read Stiglitz’s book because many of the intuitions about learning and its economic impact we’ve had over the years in the Lean community were now backed up with economic analysis of the higher order. Few people are listening as yet, but it’s fantastic to see the theory is being hammered out.

  1. You stress in the book the importance of Visual Control. How would you sell such visual controls on the wall in a digital era and in the time of the paperless organization. What value does this visual control bring that digital doesn’t offer?

I think there is a misunderstanding. Human think with their hands (concrete) differently than with their head (abstract). Visual Control helps in materializing concepts and makes them actionable, moving from abstract to concrete. If you think “right of way”, it’s an abstract concept and you need to think about it. It’s not as efficient as a red light. Visualizing things makes work more intuitive and people trust it more. It makes work easier.

Again, I have nothing against digital tools. Back in 2002 I co-authored a book called e-management @work about the impact of the Internet on work, and I’m happy to say I don’t have to blush about the main arguments we were making then. We argued that digital technologies were about to trigger an unprecedented productivity revolution in services, which is pretty much what is happening and why middle-class jobs are under such pressure. Things happened faster than we expected it (particularly publishing just after the 2001 NASDAQ crash) but on the whole, I’d say our points then still stand.

On the other hand, what we did not see coming is the impoverishment of human thinking and decision-making due to digital systems. Lean has always been opposed to SAP-style MRPs, but with hindsight, the same process is at work with CAD design, automated trading and so forth – people lose their intuition of what the system does in the real world and the result is a “post-truth” world and poor quality.

The digital world is a unique time in human history because it makes us think only in the two dimensions (of the screen) and manipulating images without understanding how they connect to what they represent. Our mind is wired to think in three dimensions and to interact with things – much of our understanding still comes from handling stuff. Digital has one huge drawback: it removes intuition of how things work. With cardboard cards, such as Kanban cards, you materialize information, making it concrete as if they were real. People then think very differently and more concretely when they have real things in their hand.

Concrete thinking and abstract thinking need to complement each other – one with the other leads to either unpractical abstract solutions or to short-sighted fixes that don’t solve the problem. When the ERP rules the workflow and the factory, people stop thinking. When CAD runs the engineer than engineers start to play Tetris and no-one really knows what is going on. I have this Interesting example to illustrate it.

I was with a Toyota sensei in a factory, at the quality control point. They have digitalized the checklist of product checks. The sensei said « I don’t like this and I don’t why » to start with. As we looked, we both realized that with paper the operators didn’t need to think about where to put the check and all their attention was on the car. With the tablet, the check keeps on moving and they looked at their tablet as much as the car.

Don’t get me wrong, digital tools offer unparalleled opportunities for greater connectivity and a great part of Lean thinking can absolutely benefit from that. After all, Kanban originally connected all processes through a pull system, so connectivity really matters. But digital has also to be handled with care when deeper thinking or intuition is needed.

  1. How relevant becomes Lean in a time where more and more Robots get into the factories. And how does Toyota cope with it.

When Sakichi Toyoda invented his first, wooden, mechanical loom, still in the days of the samurai in XIXth century Japan, his first technical invention aimed to make his mother job easier (the shuttle could be used with one hand as opposed to needing both hands). He then invented an automatic thread change. Next thing he invented was andon. All these mechanical inventions were about liberating people from burdensome tasks.

Fast forward to 21st century -now you have 2 concepts of self-driving car. On one extreme there is Uber dreaming of getting rid of the drivers : no more social problems (Note : the essence of engineering culture as defined by Edgar Schein – Cecil), on the other there is Toyota’s vision of cars assisting their driver as much as they can. The human leads, always. It’s not a question about no robots or more robots. In Lean, we don’t exploit our employees or customers. We want to work with them: we want to automate what is burdensome for our customers and employees. Every second of our employees is valuable and we don’t want to waste their time. Some things will be automated but in Lean it’s intelligent automation, helping people not in a view of removing them altogether.

  1. First we thought that Lean was all about tools. Then we thought that Lean was about management practices and solving problems. Now you are back in saying that Lean is about tools. Could you please explain the thinking journey behind this loop ?

Do you remember the zen story of the man who hasn’t heard of zen and sees the mountain as a mountain, then the man who has studied zen for ten years and now no longer sees the mountain as just a mountain, but a movement of the mind or some such thing, and finally the man who gets zen and… sees the mountain as a mountain.

When we started Lean we just saw it as an efficiency method: « take waste out of every process and it should be better ». It turned out it was not that straightforward. Waste-hunting in every box did not improve the overall flow of value or grow people’s abilities (often, quite the reverse). Then we understood it was about improving Value Streams, the flow of value and information. Then, ten years after the publication of Lean Thinking, we realized that some leaders succeeded spectacularly well with Lean, but most corporate efforts were disappointing and falling far short of Lean’s promise.

Finally, we realized it was not about improving the flow to optimize processes, but about learning by problem solving; not about learning to flow faster it’s about flow faster to learn and to get better. The tools are the analysis method for the people to learn and solve the problems revealed by the flow. It’s all about engaging people in their work and improving it.

One question you’re not asking and that I try to convey in the book. Does every tool helps in making work more engaging? Do you want to get close to the production analysis board? Does it tell you which direction to take your next step? This is very important. Lean is unique because it’s people-centric. We want to be inclusive. It’s not about exploiting people but about making them get together. Mutual trust is the real Lean secret, and foundation.

What the system does is create an hourly schedule to work at the same tempo as everybody else. The job of management is giving the means to people to reach the hourly objective. We are back to the 4 M’s: Machine, Method, Materials, (Wo)Men. The basis of mutual trust which makes people happy and proud at doing the work. It gives meaning and it motivates them. The tools are about giving the people the means to find out what goes right or wrong in their job. If it creates engagement, it works.

We finally realized that, on a case by case basis, the difference between leaders who succeed and the ones who don’t was explained by the fact that the successful ones were deliberately seeking to create learning. In seeking to set up this learning system, they interpret Lean in their right way and then it takes off. All of those who weren’t looking past squeezing waste out of the process and eventually saw their Lean initiatives peter out.

  1. Last but not least, as in most of your books, you have many great contributors: Dan Jones, Jeffrey Liker, Mike Orzen, Jacques Chaize etc … You are considered today as one of the most prominent Lean thinker. Yet, why is it so important for you to give this collaborative dimension to your work and to most of your books.

I’ve always been convinced that you see further standing on the shoulders of giants. Most of what I know of Lean I learned from my father, Freddy Ballé, who learned it from his Toyota sensei, who, in turned worked closely with Taiichi Ohno. The learning process is one of revisiting what you know – or think you know – to make sure of your understanding. Some things stay, some change. But also questioning the evidence, again and again.

This, I find, is a collaborative effort. The papers in Lead With Lean are mostly the result of ongoing discussions, arguments, disagreements, and rarely come out of solitary deep thinking. I have been very fortunate to be able to learn from such knowledgeable and insightful authors and find that their opinion is always valuable and takes me into my own blind spots.

I feel that the point of practicing Lean is not knowing Lean, but learning Lean. Like the blind men around the elephant, we all have different takes on Lean. Dan Jones has a unique gasp of the how to flow value. Jeff Liker has unmatched knowledge of Toyota’s history and culture. I have an intuition of Lean as a learning system rather than a management system. By combining these different “angles of view” we reach for a more complete understanding of what Lean is and could be.

  1. You have another book scheduled later this year. What is this other book about and how does it offer a complementary perspective to Lead With Lean ?

Indeed, Dan, Jacques, Orry and I are publishing The Lean Strategy in the spring. In many ways, this book is the result of the learning process we can see in Lead With Lean. This new book is a rethink of Lean Thinking twenty years after the original one, where we try to share our conclusions from the various experiments that have happened since. The Lean Strategy is a more classical business book, with a theory of Lean supported by company cases. Lead With Lean, by contrast, is more of an impressionist view of our thinking. In many ways, Lead With Lean can be seen as a field book companion to The Lean Strategy, although it came out first.

It’s a book to dip in and out, that was carefully edited by Roberto Priolo, the editor of Planet Lean, to put together the most “aha!” short pieces to trigger new insights for readers so that the make their own overall image. In The Lean Strategy, we will affirm our model, resulting from many of the papers presented here. Lead With Lean is more of a conversation with readers where various points and angles are considered for the reader to make their own mental model of Lean leadership and practice.

Thank you Michael !

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s