right now to introduce our opening keynote presenter dr. Jeffrey Leiter so dr. Jeffrey lifer is professor industrial operations engineering at the University of Michigan and also president of liker advisors but I think we all know dr. Jeffery like her as author of the toilet away 14 management principles from the world’s greatest manufacturer talking about writing this new book he’s writing a new book with Gary combis on the toyota way to lean leadership so that’s the theme of his presentation this morning so dr. Lake is going to share with us at the toilet of leadership development model and maybe give us some tips and advice on how to develop lean leaders please join me in welcoming dr. Jeffery Laker thank you I’ve been hearing great things about the conference and the people coming here and the excitement and so hopefully you’ll be as nice to me as you were to the other speakers I where’s the president okay so I’ll be talking about this new book the pterygoid lean leadership if you it’s not kind of obvious the way I laid this out but if you looked over time at the books I’ve come out with they’ve increasingly moved from broad general principles to talking about people and leadership and culture and some of the softer aspects I also had the opportunity to visit your for those of you are local to take a little trip down the river and it was really nice hot but really nice and you can see the beauty and then again for those of you locally not to be offensive but apparent but I also got a picture of this sort of albatross of Museum I think you’re human rights museum which is a wonderful idea and I’m sure it’s going to be a fabulous museum funnier so why the you know the one of the things that sort of struck me when I was was looking at it is is this a lien problem and we talked about lien and we think about taking waste out and we and ice-t mapping and 5s and you’ve got this museum that’s several years late and way over budget and people were looking forward to it and not the wait but look forward to it for a while and I could you could you go in as a lien person now and solve this problem you know coming with post-it notes and paint and 5s or do some vice tree mapping and obviously the answer is no but again the question is is this a lien problem and I think the answer is yes except you have to take a much broader view of lien so for example did they do a good job of even conceiving of this museum talking about the lower left-hand corner that looks sort of like a big shift ship is that did they make a good decision on how big and grandiose the structure should be for a museum on human rights did they have a good plan for executing did they have a good relationship with vendors did they eliminate all the sources of uncertainty that they possibly could in the planning and design stage and the answer is obviously no that they it probably is what much too grandiose it might not even be appropriate for a message about human rights and it and I doubt that they did they planned a whole lot of anything really well so the way I’ve come to learn about lean or at least a total way is that really at the core is plan-do-check-act and in any problem-solving process you’ll see that at least 60% of the steps whether it’s 3 out of 5 or 6 out of 8 planning steps and start with the question what is the problem and then you have to understand the current situation and you have to understand your customer and you have to think very broadly about alternatives before you narrow down to a particular alternative and then maybe make a model in this case or several models and show them to lots of people and get lots of input so when you make a decision it’s a decision that’s right for the customer and also low-risk and then you have to go through the process of very detailed planning and then revise the plan as you’re implementing and that whole process of PDCA if it were done well what have led to a museum that would be on budget on time and people would be enjoying it right now there’s no question in my mind that that’s true and that would be a lean project now maybe vice to mapping as a project planning method would have been useful but there’s many other project planning methods that also be useful so when I come to learn about lean I’ve realized that for many of us and particularly appears back there’s a growing sophistication we kind of got trapped into a fairly narrow view of what we mean by this concept of lean so the problem that I want to address and you should always start with the problem the problem is that not everything here is a problem but the background is that lean has become a global movement and many of you have travel abroad some of you don’t I travel all the time and I go to many different countries and many different industries and I’ve worked it with the same defense and I’ve worked in government and healthcare and it’s out there and it’s spreading and it survives kind of like a roach you just can’t get rid of it it has successes it has failures and they’ll go through down terms but some has been going on since I started studying it back in the early 1980s and it survived so we have something important out there as a movement there’s now become a somewhat standard tool set there’s many different places you can go to take lien courses you want to lean enterprises to website and they have workbooks and you’re glue to the topics and there’s kind of a standard vocabulary and a standard set of tools and they include this list and then they include methods of implementation like the Kaizen event and when you do a reasonable job of applying any of these tools to a problem that fits you get results and I personally have never been a situation where we we might have trouble getting through layers of management to actually do something but when we actually get to the to the shop floor get to the Gambon we get a team of people together and we pick a problem we’ll use some tools i’ve yet to experience a situation where we didn’t make significant progress usually pretty dramatic progress and people are thinking differently and they’re excited and they’re engaged and that’s actually not difficult to do with any reasonable level of facilitation skill so it works but it’s rare that if you come back in a year you’ll see what you implemented in that workshop it usually has slipped back and people give you all sorts of excuses and reasons why they’re not keeping up the metric board or why they’re no longer changing over the equipment at ten minutes they flip back to twenty five minutes and there’s lots of reasons they’re busy and but it slipped back and I thought to give you one story we did work for the Navy and we the Admiral got an agreement from the heads of each of the shipyards there doing overhaul and repair that they that they would let us do one demonstration Kaizen event and each shipyard and we did it and each one was successful and in one of the shipyards that we ended up working a lot with we worked on the ball valve area which was more repetitive than a few hundred a year and we completely turned the shop upside down in a week and had good flow and had less inventory and everybody thought this was just great and this is the way things should be about six months later a new person got appointed to be the head of lien and he had worked in the shipyard his whole life and at one point he had been supervisor of the ball valve operation and he contacted me and said you know I heard that you were our our consultant our sensei and I I want to learn and I’ve been reading books and I went back to the ball valve area because that was on model area and it looks the same as it looked 20 years ago and I was a supervisor there so I’m trying to figure out what happened and I said I would probably happened is what always happens which is that all these great ideas really didn’t get implemented they appeared to be implemented because we physically move things around but we hadn’t really changed the thinking of the people in the area and you can’t do that in a week it’s impossible you can get excited and engaged and you have great report outs and you wear t-shirts and it’s a lot of fun but you don’t change people’s thinking in a week so he said well I was thinking everything I read about says we should have a model area and I was thinking maybe the ball valve should be the model area and we should redo it but this time make it stick and I had a student at the time who was needed to get his hands dirty with lean so I sent him out and he worked for six months at the end of six months they were at the point where we were at in theory on Friday of that week but as they did everything nothing every single thing we came up with one we Kaizen event had been implemented in six months but it was owned by the people in that area and they eliminate overtime and their productivity doubled and they became they actually got cited as the modeling area for the whole Navy at that time had Admirals coming and Senators coming to see this little ball valve area so the problem is that the way of thinking has some holes in it and interestingly enough if you go back to Toyota the model they don’t do anything that looks really a lot like what consultants do with lean transformations so I’ll give an example of a lean transformation at Toyota relay led by someone at Toyota and that led to my conclusion that the secret sauce because people want a silver bullet or some sort of answer to the question of how do we do it what’s the secret what’s a secret and the secret if there is any is developing leaders who engage and develop people in problem-solving or in process improvement or you can substitute organizational learning there’s a variety of words and that’s really why we wrote the book the total blood lean leadership Gary khandhas my co-author had been the first plant manager at NUMMI after working for 20 years at Ford and then he became the first American president of the Georgetown Kentucky plant had always been Japanese and was kind of a glass ceiling for Americans and he broke through the glass ceiling that he became a managing officer in Japan and then eventually he retired and he wanted to write a book so Gary had lots of profound teaching moments when he was at NUMMI coming from Ford thinking like a Ford manager and he would get these abrupt messages that would just shake his way of psyching would shake his world and he remembers these highlights so I for the book I interviewed him for hundreds of hours and then extracted stories and one of them was when he walked through the body shop again he had come from Ford and in the body shop you have a lot of welding robots and things are usually laid out in such a way that there’s space between the the welded welders so that you could have inventory buffers because if some piece of equipment breaks down and a robot breaks down you don’t want to stop production so he walks through and there’s no room for any inventory at all and he goes to the president at the time and says there’s been a mistake there’s no room for inventory buffers and we’re just going to shut down the plant all the time we can’t make cars this way and the lien implementation was this answer there’s no mistake please fix the problems end of this end of the lesson he didn’t talk about value stream mapping he didn’t talk about flow he didn’t talk teach him the problem-solving method a Gehry struggled for a while with people in the area and they got the level up to some reasonable level maybe it was running at 50 percent up time and they got it up to about 75 percent of time which was better than the average for the American car companies was still far from Japan where they’re up around up over 95 percent and at that point the question is how do you get the you’ve got the low-hanging fruit how do you get all the little problems that are causing downtime and for that he had his next aha moment which was meeting with this isn’t been going on for a couple years there was a new president who comes in and this guy had been in finance in Toyota and he knows nothing about the details of a body shop and welding and people were kind of wondering why is this guy been sent here it was it was it a mistake so he calls Gary in and he says I noticed that the uptime of the body shop is far below the level in Japan and I’m concerned about that and I’ve also noticed that when I come into the office I walk by the manufacturing engineering department and the manufacturing engineers are very busy working very hard at their desks so what I would like to do is I would like to get the manufacturing engineers away from their desks and where the problems are and to do that gallery could you please make a breakdown report and you can make it on one side I want you to paper and every time there’s a breakdown of more than an hour I would like you to ask one of the engineers to make this report and the people we have a some Japanese trainers in the area and they’ll show you how to make a report they know how to do it and then every Friday for one hour I’d like to have a meeting and I’d like the engineers to present to me the breakdown report for that week so Gary cliff that was a good idea and they the engineers did it and the Japanese made boxes on the paper and I said you know first was a problem it was a a free report but they didn’t call it that and then the the young engineers American engineers would present to this finance guy again that knows very little about manufacturing and he would have a red pen and he would make a bunch of marks question marks he cross out things he’d write in notes and then it goes through that with everybody present and ask the questions and and what Gary was just amazed by is this guy had just penetrated right to the root of all the weaknesses in the problem solving of these engineers without again without having a technical back engineering background and then they would go back and they would work on this a3 again and they’d bring it back the next week and he’d have less red but they’d still be a lot of red now the interesting part of the story to me was that Gary was at these meetings and he was just floored he was just amazed by how smart this guy was and how he was able to actually understand the thinking of the engineers based on this one-page report and based on that was able to pick apart their thinking find weaknesses and then they were learning how to solve problems but at some point he asked Gary to stay behind after a few of these meetings and he says Gary son there’s a lot of red on these reports and Gary said yeah I know you’re doing a great job and he says Gary son I I think maybe if you spend more time with the engineers before the meeting though they’ll be less read on these reports and then Gary has another one of these epiphanies you know I’m actually responsible for this and then he starts spending time with these guys and then there was less read on reports and what Gary figured out was that he was a student not the engineers what the this president had noticed is that Gary wasn’t doing his job very well he wasn’t leading correctly from a Toyota point of view why would he let these engineers who reported up to him sit in their office like computers when their problems on the floor why wasn’t he solving the problems in a rigorous way and finding the root cause on the floor because he wasn’t trained and he needed to be trained but notice no a3 class no teaching the steps of problem solving just go and see and there’s a real problem this was not a made-up problem I’m the machining the but the welding part was shutting down the plant so there’s something online okay so I where’d this start this somewhat unique way of thinking about a company about a business about how you improve processes about the role of leaders and it started with Sakichi Toyoda who was the founder of to an automatic loom and most of you know the story of the wood looms the Sakichi Toyoda created and the motivation at the time he was the son of a carpenter and poor carpenter in an out-of-the-way rice farming village in Japan not near any city centers or any centers of power and he simply made the observation that women including his mother or grandmother were working their fingers to the bone making cloth for the family and for sale after a full day of work and his mission was to help them by reducing the amount of labour required to make this cloth and this was one of the looms he invented he could invent the loom partly because he understood wood he was a carpenter and he had this deep craft knowledge and he also was imaginative and he could think of clever solutions but then he could with his own hands put them into practice and the first one we created the first invention was very simple using gravity he was watching these women and they would have a shuttle of thread which they would send with her hands back and forth and then they’d have to push the thread and tighten it and that was the action back and forth push the thread and tighten the cloth and that action of pushing back and forth he thought maybe that could be done by gravity so he created a wood shoot and a system with foot pedals and with foot pedals you could make the the shuttle slide down the chute back and forth and eliminate at least half the labor and it turns out that women were three times as productive as a result this is a good Kaizen okay but again it came from a need a real need it came from somebody who had deeply invested in skills and craft based knowledge and could actually do it with her hands and could imagine it imagine how you could make it because of his deep knowledge of woodworking and then he improved upon it and then he improved upon it and then he improved upon it and eventually he had a vision of making a fully functional automatic loom which I think about 20 years later became the G type loom which at the time was the only fully automatic loom in the world and was the best loom and sold that to the Platt brothers in England that money then became the capital to start you at a motor company so that’s how the story goes what did he really start he started this company that made looms and he invented lots of things everything he invented was the solution to a specific problem and it was all done by trial and error so he gets from nothing to the best loom in the world that’s fully automated and how’s he do that it wasn’t a dream wherein he somehow in his dream imagines the G type loom it was through solving hundreds of problems and working with a team of people doing it so the what he did besides made a loom is he put his imprint on what’s now Toyota Motor Company he’s the core reason for the values of the company and the values in well he also is known as the king of inventors in Japan as he grew older his vision expanded so at some point is helping women in the community later in his life it became helping Japan to industrialize and some call him the father of industrialization in Japan later became contributing to the world to make life easier for customers in the world but always a vision of somehow benefiting society so the core values coming from Sakichi Toyoda they’re still with the company today are contribute to society that’s the purpose of the company the customer always comes first and the company always comes second respect for people know your business you can’t be hands-off and simply like Gary’s trying to do delegate and watch from the sidelines get your hands dirty hardwork discipline teamwork and constant innovation to our division he had the vision for the g-type lumen qual that we had a vision for a fully automated loom he took decades to get there but every improved him and every proved it he made who was solving one problem and he didn’t know how he’s going to get beyond that one problem to this perfect loom but he knew there would be a next problem and next problem and over time if he kept on solving problems who’d get closer and closer to that vision so and his favorite book was a book by Sam smiles called self-help who his mission in life was to help juvenile delinquents who got in prison and helped them recover and become productive citizens in England and he writes this book about how he teaches these young people young men to become productive citizens and to make them self-reliant realize they the world doesn’t own anything that they have to do with themselves they have to be responsible for their own actions and that’s the favorite book of Sakichi Toyoda and you can sort of see how he would doubt fit his view of the world and how that view of the world then gets translated into the culture of Toyota in a seminal speech by son Keith Rowe who had been asked by his father to do something special for society to contribute something Sakhi cheeto said I contributed the automatic loom now it’s your turn and teacher ed said it picks automobiles which was very unlikely as a choice given that there nobody out in the middle of nowhere in Japan and there’s huge companies like Ford and it can’t possibly compete and in a seminal speech she says I plan to cut down on a slack time in our work processes as the basic principle I will uphold the just-in-time approach now he could have said that today right and he’d have an army and consultants behind him and he’d have my books and he’d have the Allied books and everybody know exactly was talking about by just-in-time but this is in about 1939 and lean hadn’t been invented a term and the concept of just-in-time had not been invented so he made it up it was a vision how he made it up I have no I above are shows different stories and one is that he actually worked for the plat brothers for one year in England and one of the things he marveled that is how on-time the trains were which is apparently was not true in Japan at the time and he noticed that it didn’t if he was one second late he might as well be ten hours late he was going to miss a train but if he got there early he was standing around wasting his time so he it became kind of a passion for him to get to that train spot exactly the right time within seconds of the train coming getting on the train and apparently that had a lot to do with his conception of just-in-time but it would there’s lots of stories when nobody really knows what we do know is that he conceptualized a vision like Sakichi – his vision of an automatic room and had no idea exactly what it was or how he’s going to get there and the person who made it happen who made this vision a reality was tayi giono a manufacturing genius and he and his team accepted Keith Richards challenge to achieve just in time and also there’s a goal a challenge which was to catch up to Ford’s productivity in three years when Ford was about nine times as productive and making over a million vehicles a year and Toyota’s making a few thousand and then making a lot of variety not just one Model T or as I guess it’s mile a at the time and the way he achieves the Toyota Production system which he doesn’t know what it’s called and there’s no it doesn’t know what he’s trying to achieve he’s just trying to achieve a manufacturing system that under the conditions that they faced in Japan at that time without capital without resources they could somehow learn to compete with this global giant that was the challenge and the way he did it was through adaptive problem-solving like Sakichi Toyoda he solves one problem at a time and hid in his book the chair production system they put in a time line and you can see where each aspect of the Toyota Production system got introduced and in each time he had discovered this is really the problem we face right now and then who come up with a solution and then over time it and it became a system so the important thing is that I this is it started the 50s and took decades to evolve it evolved it didn’t it wasn’t invented and it was vented by repeatedly solving problems and it’s still adapting and is still evolving today and nobody in Toyota has a black belt in TPS or has a certification TPS and nobody intuitive will say that they’re an expert at TPS we also we’re just learning and this is now 60 years later so I came up in the total way with a model there’s a different version of it but I came up with a model with four p’s and it started with philosophy which is the company purpose there’s a little different model but it was a philosophy and then processes and people and problem-solving and what this shows is that really everything has to be arrayed around one thing which is the purpose the vision so Sakichi – it had a clear vision and kiryat sort of had a clear vision and the vision was something that seemed impossible and they had no idea how they’re going to get there they didn’t have a roadmap and it involved all these things they had to have processes that were repeatable that they could test and adjust and adapt they had to have people who are smart and committed doing that there are certain tools that evolved over time in the Toyota Production system and every tool was a solution to a problem but unfortunately too often lean is reduced to a waste reduction toolkit and we’ve learned and this was actually quoted a paraphrase of a quote from TG oh no all we’re trying to do is shorten the time from when the customer places the order to when we build and ship the product and his his vision for Toyota was a bill to auto company we have no waste when a customer wants a car would build a car based on that customer specifications so this is accurate that this was the vision so what we’re trying to do is eliminate waste when we’re working for the Navy and then later the Air Force they loved the phrase war on waste any guesses why they might like that so the metaphor fit but what is the image that you get when you have a war on waste you’re there with your machine gun or your sniper or your ballistic missile and you’ve got a target you hit the target you wipe it out and the target is time and you succeeded in the mission so it’s a vision of eliminating things eliminate waste of steps eliminate wasting activities and it is blown up and it’s gone and I you now you can move to the next target is that really what leads without what Sakichi Toyoda was doing could say Keesha to have invented the best loom in the world by going through the shop and finding waste and eliminating it so the real genius of TPS was not that you find ways to eliminate waste and critten and make processes closer together and eliminate inventory the real genius that Tatiana discovered really very early in the process is that when you have disconnected processes problems hide and when you connect processes the problems appear so if I have two weeks to get your report that you need then and I know that anytime in the two weeks I can work on this report then I can push put it off and cram at the end of the two week so I can work on it early and I can make adjustments to it now and then or I might it might be a better situation for me is if you ask for five reports in a month and I know full well that when I give you five reports you don’t have time to read them so when we can build in advance in batches we have and we have built in opportunities to hide problems by the time my boss discovers that problem one of the reports will be months away and then we’ll work worried about the problem then now what happens if I have an assignment to buy it’s now noon by tomorrow morning I need this report and we’re going to take immediate action now there’s some pressure I know that if I don’t do the job there’s going to be immediate recognition and that’s what happens in a factory when you reduce inventory that’s what happened when Gary was in the body shop and there was no inventory the process shuts down gary thought it was a mistake in the design of the body shop but in fact it was the design of the body shop to expose problems and then you need to get clever and you have needed to develop skill in solving the problems and if you only put a bandaid on if you don’t do a root cause analysis at some point the problems will keep on coming back and the problems will accumulate there always be new problems and then you end up with chaos you end up with fire fighting you end up with out of control processes so in tightly linked processes whatever they are whether it’s a knowledge work process or software programming or manufacturer whatever the problems are when you have tightly linked processes and the product of one step immediately becomes the input to another step and there’s some way of judging the quality of that product then problems will be discovered very quickly then you can do something very special which is you can solve problems one by one and I call out one piece flow problem-solving now when we look at masses of data and get our Six Sigma Black Belts to analyze it a hundred ways you are now doing batch problem-solving and you’ll find a few of the biggest common problems and solve them and forget the rest and you don’t know enough in detail about any of the problems to really find the root cause so the the topic is developing to the leadership and the way that in – in Japan you learn to be a carpenter was through the master apprentice relationship and in that relationship the master was the master and the apprentice was the student who’s humble who’s groveling who wants to learn from the master and the master can basically ask them to do anything and the student is expected to do it if the first lesson in being a blacksmith is to clean the floor with a toothbrush you clean the floor with a toothbrush and you assume the master has some reason for wanting you to do that there’s some lesson that will come out of that so that very much influenced the Toyota culture that’s how to key to Toyota was taught and that today is still the the method they now caught on the job development but that’s the method of teaching skills within Toyota is the master apprentice relationship it doesn’t happen every place one of the learnings I try to give in my books I get very explicitly now is caveat to Ed is made up of people and people are not perfect and when you have hundreds of thousands of people there’s a lot more variation so there’s all sorts of things that happen within Toyota but the model based on the principles is that you learn by doing with someone who is more expert than you who’s watching you and they’re critiquing you and they’re giving you feedback and they’re asking challenging questions and that’s what they would call in Toyota leadership the other driver is striving for perfection and Gary conda’s told me story about going to Japan later in his career when he became a legal officer and Akio Toyoda greeted him when he arrived and immediately took him to the place where his where Sakichi Toyoda had been born and – and then they went to a Japanese tea ceremony the Japanese tea ceremony is something you do as a tourist yeah when I boat right here yesterday in Japan one of the things you want to do on your list is participate in the tea ceremony why do you want to do it because it’s going to take an hour to get forward a cup of tea why not go to Starbucks and the reason is that in that time period a lot of special things happen and if you observe which I’ve been I was through a t-tail Minette ceremony I had no idea by the end of I thought I was done I had no idea why I’ve done that and why it was such a big deal but if you observe better than I did what you notice is almost a show actually it is a show it’s a tightly scripted exceptionally well acted performance and the server is continually improving the service provided to the customers and has gotten better and better and better so that you would for example not notice she’s coming and going as you’re talking and you would notice that every single movement and every single and eye contact and lack of eye contact everything is done it has a purpose so at the end of this tea ceremony and Gary thought it was kind of neat to see a Japanese cultural ceremony then Akio Toyoda asks Gary so what did you see which again kind of throws Gary it was a nice cup of tea and Gary starts to explain what he sees saw and then starts to realize how incredible this woman was the incredible level skill and incredible performance and finally he’s describing that and then Akio tudi says Gary you’ve just discovered the meaning of sterilized work which is striving for perfection as the individual who is trying to perfect themselves through the work that they do so how do you get leaders to be like both these leaders they that were in for Gary were Japanese Gary then had to try to become one of these leaders which was a struggle he had been with for it for twenty years and we want the leaders to do is live the values and live the philosophy to the point where it’s a part of them where they don’t have to think about it most of the things that this server did in tea-ceremony have become so routine that she can focus on the one or two little things that she might improve next time so we start with commitment to self development when Guerra was hired to run new me.they there are a lot of things they liked about Gary and one of the things that he emphasized was that in Ford he was acting like a Toyota leader he was running quality and he would actually stop production and nobody stopped production in court he would go to the workplace and he would talk to the workers need to identify the problem and the root cause the problem so he was acting like a total leader on his mind in a lot of ways he was and they said that impressed him that he had this leadership potential but what sealed the deal they did an exhaustive search before they sell Ben Gary what field the deal was that Gary repeatedly was asking questions and listening and wanted to learn and anybody that’s taught knows that you can’t teach somebody who doesn’t want to learn you can get them to write notes you can get them to feed that back on a test but you can’t teach somebody except at a very superficial level unless they want to learn and you’re always looking for that one student who’s just passionate about learning whatever it is a musical instrument a sport you’re an engineer and you’re trying to train the next generation of engineers and you find that spark of someone who really wants to learn and is passionate about it and they’re interested in improving themselves so that’s the first step is that you need to find people who are willing to commit to self-development and what you want them to learn is the TrueNorth values of the company but the only way they can learn it is by taking little steps at first they have to learn some very very basic routine patterns of behavior and then as they develop the what they’re learning is more precise and more elaborate so that’s what the Japanese are doing over here they were trying to teach I particularly gallery was use them in the most critical position and then everybody down to the team leader how to develop themselves how to learn and how to think and how to think in the to it away and then when you teach somebody then as they learn they have an obligation in the Toyota system to teach others in fact you’ll see that Tara is teaching over the world they’re teaching the they’re very open and people wonder why because that’s one of the ways they contribute to society that’s their mission is to teach to learn and teach learn and teach and one of the things that you notice is that if you teach you learn probably more than a student so they ask a question and you’re caught by surprise and you realize you might have got about that twenty years ago but suddenly it brings it back it makes you think about why we do this or maybe you never thought about it before but what you need to do to coach and develop others is you need to be able to understand that person as an individual what are their passions what are the strengths what are their weaknesses what are they doing now what would be a good vision for them as a next step in their progression and what are some concrete steps you could take right now so that they could start to make progress toward that vision and we use the term self development learning cycles that each time you learn something you put something in practice you get feedback and then you modify your behavior or thinking you’ve gone through a PDCA learning cycle and it’s for repeated learning cycles that you get better and better and better as a person you have more to contribute to the company and world and you actually learn how to learn so it becomes easier on the next PDCA loop once you’re at a level where your your leadership has a good understanding of their roles of what it is to learn of how to solve problems of how to develop people then you need to get down to the core value idle operations and your goal is your first goal is to create a reliable stable self-sustaining process on the shop floor of running the process at a high level and improving the process at a high level and that takes skill and it takes another kind of leadership it takes the leadership of the supervisor the team leave the hands-on person was on the floor and how they react minute by minute to the problems that they face and now you’re building local capability so that you as a leader who may have 500 people reporting to you don’t have to do the thinking for 500 people the thinking is being done by 500 people but in a routine way it’s an app there’s a natural rhythm daily to the problem-solving to the Kaizen and now you’ve got an organization which the top the middle and the bottom share values share philosophy and share some level of capability then you can do the real magic which is align the goals and align the improvement activities so they add up to a really big impact on the company and that’s called hoshin kanri and what you have to do for Ocean connery is start with get a true north vision what is that we’re trying to achieve in the ideal and how do we know if we’re on track or off track and then what shorter term goals do we have and how to my goals align with my boss and how am I going to approach solving this goal which mate right now one of the goals in Japan they have a problem that the N is too strong and also they get taxed a lot there’s a lot of problems with being in Japan so there’s an easy countermeasure which is pull out move up move production overseas and they’ve been criticized for not doing that and not being a good corporate citizen caring about their shareholders enough but they also have a feeling of more obligation and part of that obligation is with Japanese government and the Japanese people and they’ve made a commitment to keep a certain number of jobs in Japan it’s an informal commitment it’s not written down it’s not legally binding but they feel a sense of honour to keep those jobs in Japan so if you can’t keep if you’re going to keep the jobs in the picture pan and you’ve got a problem that it’s a terrible place to do business then you have to solve the problem in a different way than moving production out and the way they solved it is by the ocean economy process which was in manufacturing for example reduced costs by 30% and then we can be competitive not a trivial thing when you are already one of the most efficient companies in the world and is not any low-hanging fruit now the senior managers the general manager is the vice president’s when they got that request what you can say is also an order they say hi we will make it happen have no idea how they’re going to do it but they’re doing it they’re already into the second year and they’re working it’s over three years it’s 10% a year and they’re right on target and what’s the magic the magic is one through three that they’ve invested over decades in developing leaders who have gone through appetitive PDCA loops that have learned how to solve problems they’ve learned how to lead they’ve learned how to engage people and they’ve learned that when we solve lots of little problems and some big problems in a systematic way and we have a clear goal in mind we always achieve the goal we don’t know how we’re going to achieve it at the beginning and we don’t care we don’t need to have roadmap we’re willing to take a step into the land of uncertainty and start trying things so the mentor in the meantime there’s always somebody there who’s checking on you and they’re trying to teach you the core values which starts with a spirit of challenge and that’s what happens when I say hi I’ll do it I’m taking on a challenge to each owner took on the challenge and they’re going to do it through continuous improvement and they’re going to do it by doing it at the gemba by going and seeing and not by sitting in the office and looking at their spreadsheet to see if the numbers are on track and they’re to do it through teamwork and they’re going to do it in a way that’s respectful of people so they have to live those values if they don’t live the values they get the results they still felt and all of these steps take PDCA loops these learning cycles I mentioned over and over and over again so you’re continually always developing yourself you’re always teaching others and improving the way you teach others all these steps are all work works in progress then it’s not like a linear thing we’re at four and then you’re done now the problem is that these days hoshin Connery’s become popular and see senior executives love it if you go to any senior executive and you say I’ve gotta weigh in which any order you give with any target you set will be carried out and your target will be achieved I guarantee you will not get kicked out of anybody’s office unless I don’t believe you but nobody’s going to say that’s a dumb idea why would I want that so they want that and it’s a very attractive actually seductive but they haven’t gotten through one through three so with an incapable organization they want to shove goals and objectives down to that organization and somehow good results and what using a good process are going to happen at the heart of this and Toyota is the work group and the work group is the same really throughout the company it’s it’s very defined in manufacturing there’s a group leader who’s the first line supervisor there are team leaders who are working level people and they have time off line to do team leader work and there’s always four team like this of twenty-something people with four team leaders the ideal is that two people are off line respond to and on and working on Kaizen and collecting data and doing quality checks and watching people and correcting them and training them as they do the work to the sterilized work and there’s two people who are working online and they’re rotating between working online and being offline as leader but there’s never should be a situation where they’re all working online and if we’re all offline you’ve got probably waste that might be necessary in the very early stages of launching a plan so they’re not working team leaders in that there’s always enough resources offline to actually respond to the and on calls that are happening frequently and also to work on continuous improvement and help the group leader in some cases the group leader becomes a team leader and that’s when they’re in a crisis mode that’s when you know they have trouble this is the visual meeting area for the group leaders know this is not that’s what’s elaborate enough that could be for a whole plant but it’s just for one group leader and as many group leaves which have say it’s one to twenty five and in Georgetown Kentucky they have 6,000 people so that’s a lot of boards and they still print out the paper even though it comes off of computer and they post it and they have a simple visual that may be hit hard to see but you might see red Xs and that’s where your eye should be drawn is to the red axis because that’s where the problems are and a problem means we’re not on track this is what we should be doing this week this is what we should have accomplished in quality improvement and safety improvement and cost reduction and we didn’t do it so we have a problem and that’s where they need coaching support and the top levels come down and see that and they discuss it and they walk the line and they try to help them mostly by asking them challenging questions and these boards are aligned so the trim group one which is part of assembly they have their top level objectives which are the hoshin objectives of their boss and then they break those down to key performance indicators two metrics that mean something for their process and we’ll break it down to what they’re working on right now we’re working on reducing defects right now in this one process for this week and when we achieve our goal we’ll get a little closer to the quality defect KPI and target that the bless us for our group and then that rose all the way up to the plant level where they have a meeting room with all the metrics for all the shops in the plant so you have a line of sight from the top to the bottom but the landline sites in the computer but the usefulness of it is really to go and see the actual situation and go where the boards are and then when there’s red go where the problem is and see it firsthand this was a lot of things Gary set up one of the first things he set up when he left Riyadh and became the CEO of Dana which is a whole other story a turnaround story where they actually built really good leaders while they were shutting down plants in order to survive they were emerging from bankruptcy and then the recession hit and gas prices went up and they had to downsize and restructure to survive and Gary’s job was building operational excellence he was the CEO and the chairman was tearing down and was building up at the same time and the way built up is through starting with the key performance indicators and a frequency of reporting and brought in knowledgeable people who could coach so that if your plant manager every week you talked on the phone to a coach and told them what you did this week what worked what didn’t work what are the red items the person at the other end was asking you questions and then you would work on some things and report back the next week and if you are in a shop you had an hour by hour board very simple many people have it all you need is a flip chart and marker every hour what am I supposed to produce how many good parts how many did I produce why is there a difference and it leads to daily problem solving you start to see the process of it’s serious and you know good leaders you’ll start to see the process stabilize and then start to improve so there’s a lot of talk these days about sterilized work for managers I know you’ve got exposed to that at this conference and really what you’re trying to do as a leader is you’re trying to help people you can pull people up some would show the leader behind watching but in any case the leaders job is to raise the level of other people and to do this they need a certain part portion of their job to be repetitive activities that are checking and giving feedback and coaching otherwise they won’t do it because there’s so many distractions the higher up you go the more distractions there are from outside the company from many parts of the company for a team leader the repetitive part of the job can be most of their job for a senior executive the firm manager the repetitive part is a small part of their job but there’s still some portion of the job that can be repetitive the good thing about something repetitive is it becomes a habit and you don’t have to think every day how am I going to do my gimble walk how am I going to check the process because you’ve got a routine and this is an example of repetitive activities designed to identify abnormal situations and it’s done at the gamba and the reason one of the reasons you have all these boards that are so clear here’s the red here are the problems here is the target here’s the actual is not for not just for the people in the work area it might be helpful to them but they might every no but it’s really helpful for management to come and coach time to ask enough questions to really understand all the problems in the area but they can see a red X so this would be example of a daily round that the plant manager is walking through the plant and you’ll see the president of the Toyota plants the president’s will make a daily walk and it’s just part of their routine they’ll do it every day unless there’s some emergency and this is the area they’ve decided to do a deep dive for this work group I’m explained more time and they’ll change that every day and then every place they go there’s things that they’re looking for to have something that they’ve been focusing on and for example in HR it might be the hiring plan and they’re going to be asking questions about that and if it’s visual and if they can see the status then it’s much easier for them to ask the right questions and challenge the thinking of people okay I so this is a necessary step but it’s only a step until leaders naturally become lean leaders until they’ve developed a point where they just do this and they don’t need it written down and they don’t need it to be calm formal written standardized work in the book we make a little bit disparaging analogy and then say it’s like training wheels on a bicycle it will help you to learn but at some point somebody’s got to give you a push without the training wheels where you’re actually riding the bike so what the leaders are doing is asking questions listening and helping actually supporting people at the gamba and they have to learn it and like anything that you learn that’s complex it doesn’t happen in a one week or two week or two day classroom training course none of these leaders none of these leader teachers would even consider the possibility of certifying their students in a one week or two week course it’s going to take years it’s going to take trying it’s going to take PDCA over and over again they know that they don’t know PDCA is they didn’t hear about Deming but they know how to teach the skills that they’ve mastered so in summary what neatly mean lean leaders need is to manage from the gemba and they need to develop themselves and others to live the core values the philosophy to manage effectively from the gamba so that they actually know what they’re doing when they’re making these standard walks to become a role model for a disciplined problem-solving and to become a teacher and a coach for discipline problems on staff we all do it and then they have to be a teach others to do it and the final note is from a former executive VP who says the most important factors are patience focus on the long term rather than the short-term reinvestment in people product and plant and an unforgiving commitment to quality thank you