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Implementing Lean Marketing Systems
Kaizen with Dr. Michael Balle
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Implementing Lean Marketing Systems Michael Ballé is the co-author of, The Gold Mine, a bestselling business novel of lean turnaround, and recently, The Lean Manager, a novel of lean transformation, both published by the Lean Enterprise Institute. For the past 15 years, he has studied lean transformations, helping companies develop a lean culture. He is an engaging and colorful public speaker, experienced in running interactive workshops. As a managing partner of ESG Consultants, Michael coaches executives in obtaining exceptional performance through using the lean tools, principles, and management attitudes. His main coaching technique is the “Real Place Visit,” where he helps senior executives to learn to see their own operational shop floors, teach their people the spirit of Kaizen and draw the right conclusions for their business as a whole. He has assisted companies in their Lean transformations in various fields such as manufacturing, engineering, construction, services, and healthcare. Michael holds a doctorate from the Sorbonne in Social Sciences and Knowledge Sciences. He is co-founder of the Projet Lean Entreprise and the Institut Lean France (www.lean.enst.fr), France’s leading lean initiative. It is conducted in collaboration with Telecom Paris, where Michael is associate researcher. Dr. Michael Balle is the Gemba Coach at the Lean Enterprise Institute Copyright Business901
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Implementing Lean Marketing Systems Joe Dager: Welcome, everyone. This is Joe Dager with the Business 901 Podcast. I would like to welcome Dr. Michael Balle. Dr. Balle has been studying the link between individual responsibility and large-scale change for the past 15 years. He's a Lean expert and contributor to "The Lean Edge." Michael, when you talk about Kaizen, you talk about Kaizen on an individual basis. Can you explain that? Michael Balle: Absolutely. Kaizen is always individual. There's a difference in perspective, and we're very biased by our Taylorist pasts. Our understanding we usually have is that performance is the result of processes. We all buy that, and its fine. Our thinking is that if you hit each of these processes with an improvement project, and people call it Kaizen but it's not, then the results should be improved performance. Evidence over the past 20 years has shown that this is not the case. What you do have is quick hits. You can have some savings, or you have some low-hanging fruit, but you don't have the improvement we're looking for. The other way of looking at this is that any process is just a collection of individuals. If each individual is better at their job, then collectively they will come up with a process that performs better and delivers in performance. I think this is the key to understanding. Kaizen is an individual activity to make you better at your job. This is something we see with Lean students. After studying Lean for a while, you ask them the question, "Do you feel you're mastering Lean better?" and they say, "Well, no. The system, it seems still as mysterious and deep Copyright Business901
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Implementing Lean Marketing Systems and hard to master." You ask them the second question, "Are you better at your jobs? Do you feel you're better at your jobs?" They say, "No debate, Absolutely, yes." They're confident that they're a lot better at their jobs. This is what Kaizen is about. Kaizen is about improving you, Joe. By doing Kaizen, you will improve how you see your job and how you perform at your job. This will make you stop making some classic mistakes, for this will also make you discover innovative ways of doing your job. As we all pull together with a deeper understanding of our jobs, we create processes that our competitors can never touch. In order to hold those better processes, each of us has to be better at our jobs. Joe: That seems like a real individual type of thing. I thought Lean and Kaizen and Toyota were all about sharing and different things, but that seems like I'm internalizing it. Michael: A little bit, but there's no real contradiction. Actually, this is a very interesting question as well. One of the things you will realize is that improvement happens within a relationship. You're also right. You have to be better at your job, but being better at your job usually means understanding better your customers and your suppliers as well. This is also part of Kaizen. Here's a big break-through moment in Kaizen. The technique for Kaizen, essentially, is to look for muda, or waste. Actually, it's very easy to see the waste you suffer from. There's a lot of you waiting at the bank, waiting for this, or doing this again. Anybody can see the waste their company imposes on them. That's easy. What can we do? What can we do? We're just part of the system. The breakthrough moment is when people start realizing the Copyright Business901
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Implementing Lean Marketing Systems waste they impose on somebody else, when people start seeing the waste their technical decisions has on somebody else. A real source of Kaizen is you work with a product engineer and you say when you make these choices look at the waste this imposes on the manufacturing engineer in terms of the size of the machine or the complexity of the process. Then when you work with a manufacturing engineer say, "You know, when you put in all these crazy polka yokes everywhere, all these controls, look at the waste you're imposing on the operator that has to make the part, in order to get the right part," and so on. Really, the essence of Kaizen is building people an understanding, a vision, of the waste their technical choices imposes on the work chain. It is an individual thing as it is their technical choices and it is a collective thing as it's not the waste they impose on themselves but the waste they impose on their suppliers, the waste they impose on their internal customers. Joe: This may sound kind of strange, but what you make me feel like is I have to remove myself from my body and take a couple steps and turn around and look at myself and see what I'm doing. It's really easy to sit there and shift from foot to foot and get impatient with somebody else because they should be doing it better but I always have an excuse for myself. Michael: This is exactly how it works. What Kaizen really is first you use a set analysis method. The first level of Kaizen is very simple which is to say let's look at the work we do in detail and we go step by step. Step by step we look at the norms, the details, the process we should be following step by step. Then we say do we have any ideas? Copyright Business901
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Implementing Lean Marketing Systems Do we see the muda that we create here? Do we understand what waste we create with every step and do we have any ideas? Yes, absolutely, this is the whole thing. The thing with Kaizen is you're giving each person a simple analysis method to analyze their own work and in analyzing their work they understand the muda they create and they start having ideas to fix this. Of course it's a network of people where no man is an island, no process is isolated. The one person who learns to work better for their customers will be more successful. The one person who learns to work better with their suppliers, it's like when you create a consignment stock. It's easy for you but you're imposing a lot of stock on the supplier that nobody controls. If you stop doing this then your relationship with your supplier is better, you're going to deliver better, and you're going to be more successful at your job. Joe: It's very tough to improve, let's say without a coach. Using a sports analogy, I really don't know what I'm doing with my golf swing until someone with more experience looks at it and says, "Oh, you need to do that." Isn't it the same in your work, too? Michael: Yes, absolutely. As you said, it's very hard to step away from one's self and evaluate what one does. Usually we want to improve what we already do well, what we already master. The sensei role is painful because one thing is they'll show you things you do that creates muda that you don't want to hear about. They'll say, "Yes, it does. I know you don't want to hear about this, I know you have your reasons, but understand when you create this huge variation on this supplier this is why Copyright Business901
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Implementing Lean Marketing Systems the supplier is not delivering to you. You're creating your own unhappiness." First thing, Second thing, often when we've made an experiment we're trying something because the world is complex. It's very hard to understand whether the experiment worked, didn't work, whether you tried it right or not and having an experienced person helping you evaluate what you've just done is very important. The first part, we agreed that Kaizen is about having simple analysis methods so that you can explore your own work. The second part about Kaizen is we want to go deeper into problem solving to go into deeper thinking so you have a deeper understanding of your work. This usually requires a coach and actually this usually requires a coach who understands your work pretty well because this coach will push you through asking why, through showing you things you haven't seen in your understanding of your job. Actually, this is where this starts really paying because if you're doing this over the collective of people who are part of the process and each of them understands the deeper the jobs of what they do, understands the ins and outs of what they do, they start saying, "Hang on, guys, this isn't right. If we did it this way it would be better," and so forth. This is how your process improves and this is where real performance comes. Joe: Can I do this as a team? Can I do this where we give feedback to each other and say, "Let's have some Kaizen spirit here, let's do this as a team and work together," or is it better to have a coach or sensei?
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Implementing Lean Marketing Systems Michael: I think it's an interesting one. My understanding of teamwork in the Lean sense is you always retain individual responsibility. Somebody is responsible for fixing one problem or trying one innovative solution. This individual responsibility, part of this is that you have to work with other people to achieve it. You can't solve the problem on your own. You define the scope of the problem saying, "Joe, this is this marketing problem, you need to solve it, but you need to solve it with Joe in production and Paul in marketing and Susan in development." Individual responsibility is still yours but you have to work with these other people to solve the problem. In this sense, I think this works with any Kaizen project. Somebody is responsible. There's an individual responsible to achieve the results of the Kaizen contracts, but they have to work with other people, either members of their own team or members of other functions. Joe: Now what's your definition of a Kaizen event? Is that a team getting together to do Kaizen, or what is it? Michael: Kaizen events is a rather odd thing. Here's what I saw when Toyota was teaching my father, who was CEO of a company, to run Lean. What they did, is that they chose some cells which deliver to Toyota. They never did events, but they improved the cell with a junior engineer that was helping the factory to improve the cell. They said, "How can this be of advantage to our company? They are just working so hard with a model cell." You know, there's one cell in which they are putting all their effort and the cell's transformation over time was absolutely incredible. It took us years to understand that the Copyright Business901
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Implementing Lean Marketing Systems reason they improved this cell was not just for the cell and the people living there, which was great for them, but it was very hard. I just recently met one of the junior engineers who was part of this experiment. He remembers it as extremely traumatic. He was very driven by the two other guys and had no choice but to do what he was told, and so forth, and he does not have a good memory for the project. Where it changed the company, is that in fact, my father's Sensei...at the time my father was industrial vice president, and his Sensei had a place to go to see the Toyota principles in real life. This is what Toyota was doing. It was creating this local experiment, these Gemba experiments, that they were pushing very hard, not just for the cell, but because they had things they wanted to show. Then they took the VP, and later when my father was CEO it was the same thing, took the CEO see these experiments and then changed his mind and strategy. This is what I do now, with my father, we work with the CEOs and we have, let's say -- it's not Kaizen events, "events" seems a bit strong -- but Kaizen locations. They are areas where we ask people to do Kaizen and fix one or two things and work very hard at it. It's important for their development and, of course, it's important for the local results. But more importantly, it's important because it creates a learning lab for the CEO to come there and test their ideas and their strategies. Of course, the impact of the CEO on the company is huge, so when the CEO changes his mind the impact on the company is huge. I can think of one Construction Company where their CEO suddenly realized that adversarial relationships with contractors were costing him a fortune. He changed his mind and started to change the culture and said, "Work with Copyright Business901
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Implementing Lean Marketing Systems your contractors. Don't fight with your contractors." This delivered huge monetary benefits to the company. Same thing here, I am working with a CEO in a very established automotive business. Very smart guy, he's very technically sharp. The CEO goes to visit the Kaizen projects and he's realizing that they're using huge capital expenditure equipment in a very, excuse the sense, but very German, and that in many ways we can do this with much simpler equipment and much simpler processes. Once the CEO gets this it has a huge impact with the company, because then he starts preaching to everybody and making different capital decisions and deciding that, "No they won't buy a new press for the new product, but they will use a press they already have by improving the operation of the press and the flexibility of the press. Again, there's a link between the local Kaizen and the learning from this yield. If you're just running Kaizen events hoping that you will have results what you really believe in is that you've identified your processes and you hit each process with a Kaizen event and you hope this will bring transformation. We've been doing this for 20 years, Joe, and it hasn't brought any transformation so far, but we're living in hope. Maybe it will. Joe: My understanding of Kaizen events is where you really need to provide a lot of focus in a particular area. You need to do something to get breakthrough performance you've just got some barriers there that you can't get through in just normal ways. Do you look at that as maybe contrary to Lean, that they shouldn't be that way, or do you think that's a positive step? Copyright Business901
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Implementing Lean Marketing Systems Michael: I think there are a variety of situations. It's always a positive step to look at what you're doing and try to do it differently. I think really I look at it as Kaizen is an individual thing. In fact, in a very wide way, I think if there was one lesson Toyota taught us from a management perspective it is to redefine what a job is. Job equals work plus Kaizen. People have to learn while they do their regular work. You have a variety of situations. First, you have a run of the mill situation where the process is not performing as well. You have some idea of a standard and the process is not performing at standard so you teach people to see the gaps of the standard and to basically problem solve. That's the first thing. The thing that Kaizen does is develop autonomy in problem solving. This is essential to Lean because remember the other part of Lean is that we're going to increase the flow; we're going to speed up the flow of products and work. In one process or another, reduce speed time, we speed up the flow. If we speed up the flow we also speed up the flow of problems coming up. This is why we had inventory in the first place because we had problems hidden by the inventory. Take away the inventory, the problems come up at you like there's no longer one guy playing tennis in front of you, it's one of these tennis ball guns that the problems come up so fast. You need to develop people's autonomy in developing the problems. The second thing, this is what you're saying I think, we also want to develop people's autonomy in forming their own vision of where they want to take their department or their work. In this case, everything is working fine but we want them to work further, we want them to look for breakthroughs for another level. This is another kind of Kaizen. Here I'm Copyright Business901
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Implementing Lean Marketing Systems separating the problem solving Kaizen with improvement Kaizen where you don't have a specific problem but you want to break through your performance to the next level. Joe: You're really one of the first people I hear about that talk about Kaizen on an individual basis. Are there things you can reference, maybe, that talk about Kaizen on an individual basis? Michael: Reference as in books? Joe: Books or articles or something. I'm inquisitive, as much as anything here, Michael. I hear all this "continuous improvement" and I hear teams and departments. But when you talk about Kaizen and Kaizen spirit, you talk about the individual. I don't really find other people talking about it that way. Michael: That's an interesting point. I never realized that. There's one paper we co-wrote with Art Smalley and Durward Sobek and Godefroy Beauvallet, called "The Thinking Production System." In which we say that one of the things our senses have been saying to us all along is that Lean is not applying Lean tools to every process, but developing the Kaizen spirit in every person. I'm currently writing a paper with Peter Handlinger in South Africa, who is for 17 years in Toyota, and was General Manager of PC Now. Again, we were trying to detail the structure Toyota has in place to help you do this individual Kaizen. Which is, at senior executive level you've got a Sensei. At middle manager level you've got a coordinator. At an operator level, at associate team member level, you've got expert trainers. At all levels in the Toyota structure, there is somebody who is helping you with Copyright Business901
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Implementing Lean Marketing Systems this Kaizen. In Toyota Central in Japan, this person should be your boss. The first person who should be helping you to Kaizen by acting as your teacher should be your boss. I'm also discussing with Jeff Liker, writing a paper on managers must be teachers. It's an interesting point you make. This is true. I kind of forgot why. Yes, there is this great book, which received a Shingo Prize, by Steve Hoeft on "Stories from My Sensei." It really describes in a very witty, very funny way. I love the book. The real hardcore, hardass Japanese-style sensei learning of the old days, when I remember some guy saying they had a workshop, and he didn't want to stop the conveyor, using the conveyor. The sensei just ripped the wires of the conveyor and said, "Now use it." This was a folklore. It's incredible. Nobody would ever do this now. But you're right. This is not a point that has been stressed a lot. Joe: I think it's interesting because it's the ultimate respect for people, is that if you let them develop a Kaizen spirit, if you let them develop an individual Kaizen, it's really the respect for people that you try to get across in Lean. Michael: In my sense, respect of people is that the company, you as the CEO, takes responsibility for people's success. People have a right to succeed. People have a duty to succeed; people have a right to succeed. If we start from this premise, they have to succeed in their day to day job, every day. They have to come home and say, "Look, honey, I had a successful day." What does it mean, a Copyright Business901
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Implementing Lean Marketing Systems successful day? It's an interesting question. How do you come home with a smile on your face? And secondly, they have to feel that they are succeeding in their careers. Kaizen is a key to this because most of our jobs are routine, and most of our jobs have a lot of boring aspects. I have a wonderful job, but I still have to get up early and take a train and go somewhere. There are a lot of routine aspects. But, if you bring in some measure of Kaizen every day, it makes it interesting. And it is the same thing on the shop floor, it is the same thing for me, it's everybody, the same thing. So, I can succeed better. Secondly, through these improvement activities, I will succeed in my career as well. So I absolutely agree with you. To me the definition of Lean is Lean equals Kaizen plus respect, and, in fact, the two blend into each other. Joe: It also kind of reminds me of "The Seven Habits" by Covey. That is kind of a Kaizen thing that we are looking at the roles that we play in our life. Then we look at how we can manage them and improve them. Would that be a sense of Kaizen? Michael: I am not that familiar with the Covey book. I read it a long time ago. I think this is more grounded, but it is probably the same idea. What I would say is that, when you look at the company, and this is about full enterprise Lean, you are thinking in a way that every person, every day should be clear what is their Kaizen project for themself. Copyright Business901
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Implementing Lean Marketing Systems Usually it involves other people as well, as we said, in teamwork. But they understand where they fit in the Kaizen structure. When we do Lean on a company, it is very interesting because we find ourselves defining different kinds of Kaizen. First, different modes of Kaizen at different levels of the hierarchy, when we deal with people on the shop floor it would be very simple Kaizen, just observe with very simple frameworks. Then, for middle management, we would use A3's. So, let me rephrase this. For instance, the first Kaizen tool we'll use for a team would be 5S. We do not use 5S for "clean your room." We use 5S for an analysis of the environment, and understanding how everything changes every day. So you redo 5S to see how the changes have affected your organization. Then at a team leader or a supervisor level, we essentially use 4Ms, just a simple analysis of looking at the process, looking at manpower, machinery, materials, and method. This is what we'd use for the basis of analysis in Kaizen. At the middle management level, we would use A3s. So, here we are going to deeper, more complex problems, and we would use A3s. At very senior levels we would use Hansei, which is reflect and review about strategy, policies and also politics, because that really matters at a very senior level, to understand if we are doing the right thing.
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Implementing Lean Marketing Systems At every level of the company we will have devised the Kaizen mechanism we want. Now also, in every function, we will have different Kaizen. For instance, in product engineering the Kaizen is very different than what we would have in a manufacturing engineering Kaizen. In product engineering we will pick some specific issues with product design standards that we can't respect or things we don't know how to do then in product engineering where we do cardboard cells before we build the cells and buy the machines. We create them in cardboard at a real size and we do Kaizen already on the cells. Then in production we do floor layout Kaizen with real machines and then in procurement we'll do another kind of Kaizen. What is interesting here is that I feel far more comfortable with the lean transformation when the entire company we're quite clear with the form of Kaizen each person has to do according to their level in the hierarchy and according to where they are functionally. Joe: Can Kaizen be part of standard work? Michael: That's a very interesting question. Our center of work is all about what is routine and what is not and what is prescribed and what is not. Standards in Kaizen are pretty much the same thing. Let me start by saying that having standards doesn't mean standardizing everything. It's a vocabulary confusion. Having standards doesn't mean you want everything the same for everybody everywhere, which is how we understand it from a Taylorist point of view. For instance, a corporation wants a Lean program, they want the same slide delivered in the same place in every office in the world. This is Taylorism. This doesn't make any sense from a Lean perspective, just no sense at all. Standards mean we follow a scientific process Copyright Business901
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Implementing Lean Marketing Systems so we have a few mountains of certainty. There are some things we know. There is no point in questioning them because we know them. We know that single piece flow is more effective than batch. Come on, every time we try it works, we have 20 percent productivity gains. Rather than trying to challenge this right away look at all the things that are not standard and work there. Then we have these islands of 'we believe so'. In this case we have standards but they're not so firm and we have to work a lot of Kaizen to understand whether the standard applies or not. All of this is within oceans of "we just don't know." When you look at any situation and think first is there a standard? In some cases there is a very firm standard so first thing you do is why are we not applying the standard? End of story. In most situations there is a standard somewhere but it is not applied here. Here you have to do Kaizen to understand why the standard's not applied, what makes the situation different, and so forth. Finally, in many situations where there's no standard at all. You just have no clue. There you would do Kaizen to see if you can figure out the first standard. Joe: Is Kaizen a catch-all word? Is it consultant-nese and this big picture stuff? How am I going to take it down to the individual or the middle manager and say you have to practice Kaizen every day? He's going to look at me and turn around and say, "OK, I've got these parts to get out, I've got this and that to do." Sure, we believe in continuous improvement, we're going to do it, but? Michael: To me that's a key. This is how I look at a room full of plant managers in a corporation, for instance. So I had about 15 plant managers, 15 plants across the world Copyright Business901
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Implementing Lean Marketing Systems and I was doing this recently with a CEO. And we have sheet of paper and we listen to their...we do one of these hoo-hah things, everybody comes together for a Lean seminar and they all present their plant's working plan. And the CEO with his sheet of paper, there are two columns. There is the column of people saying "I love this Kaizen stuff, but I'm so busy I'll do it when I have got time." And there's the column "Because I'm so busy putting out fires that I don't have time to do Kaizen." And there's this column of "I'm doing the Kaizen first because by doing this I will have less fires to put out." And it's very clear, you hear them when they speak, which column they're in. And that is the challenge. The challenge is, how many guys do you have in the column that says "I'm doing my Kaizen first because it makes everything better. And yes, I still have some fires but I'm living with them and it will get better," or the column of those guys who said "Listen, I'm so, so drowned with my problems that I don't have time to do Kaizen." So there's really a clear attitude shift. In terms of the other thing where you're saying in terms of making it more grounded, well that's pretty simple. You ask, whatever you do, is there one thing you want to get better at? Even in personal life, is there one thing you want to get better at? Usually we don't because it's daunting, because it's just too huge a change, we go wow. So here is the thing with Kaizen, well break it down into the first step. What is the first step of that 1,000 steps journey? What is the first step? What could you do in one minute every day? If you just had one minute every day to contribute to Kaizen, that's enough for me.
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Implementing Lean Marketing Systems The trick is from the boss's point of view is that they pick your direction with something that fits with the strategic challenge. They say "We want to go this way. Do you understand? So if you want to take your department in this way you need to make a step in this direction. Then if the step we ask you is too large, fine, let's make it a small step." So the great thing about this is that you have the global challenge, the overall challenge where you want to go, and you break it down into steps that are so small that at some point anybody can take them. If you maintain the practice of well, yeah, first step very good, then the second. I have a funny situation right now with a company starting with, they have been doing things for me, even Lean for a while. Now we're trying it for real. So they say we've decided that their problem is productivity. So we have these productivity Kaizens like you say that I had, they were so proud because they had done one and they had 40 percent productivity. They were crazy. We're talking about a model here. They thought they would have 5, they had 40 percent. They went crazy. And I said "Listen guys, I'm not even listening to you. You've just done one, just one. Let's make a second." So they made a second. They discovered new things. And again, wow. I said "Guys, I'm not even listening to you. I will start talking to you when you've done five, five. And then I will start listening to you when you have done 10." Because that's it. Because the first steps, the lessons they are drawing from these initial events, it's not lessons it's just what happened to them. It's just an adventure. So here is a Copyright Business901
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Implementing Lean Marketing Systems typical case, we need to improve productivity. So we're going to have these Kaizens focused on productivity. And if we do 10, then yes we will understand our productivity problem much better. If we just do one, it's an adventure but it doesn't tell us anything. Joe: What do you think people take away from Kaizen events? Do you think that it's a positive step to have events like that? Michael: I think it's very dependent on the coach. I think what they always draw from this is that they work together. When you work together you scratch some problems. Of course you do, sure. I think in many cases they go back and real work and real life takes over. Some people have other experiences where they've had one of these inspired Kaizen leaders, Kaizen coaches, and then they realize that there is another way to look at things. What they draw from that is that they should do Kaizen in their daily life. Those who discover this through the event, it will change their careers. But this is rare. Joe: Well, I think it is always making time for yourself is a little bit of what Kaizen is about then, right? Michael: Yeah, that's a great way to say it. I remember reading this wonderful book years ago it's called The Wealthy Barber. This is the book that inspired me to write The Gold Mine actually. It's a short novel about personal finances. People think that I wrote The Gold Mine about The Goal. But I read The Goal after I wrote The Gold Mine. For some reasons I hadn't discovered The Goal yet.
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Implementing Lean Marketing Systems But I had read this book called The Wealthy Barber. It's all about how do you save when you are self-employed, which is a difficult problem. This guy was saying well, usually we try to save when we only put aside the money left at the end of the month. Of course, there's never any money left at the end of the month. He had this concept that you should pay yourself first. That every time you get a check, you put 10 percent aside for yourself. This is how you save. I think that this is a wonderful concept and this is exactly what you're saying this is exactly what Kaizen is. You do the Kaizen first. You set aside something for yourself. In Lean terms, there is taking care of today and taking care of tomorrow. This is what Kaizen does. You need to take care of today because if not you won't have it tomorrow. You need to take care of tomorrow because if not today doesn't make any sense. So Kaizen, we make today better because it opens doors about tomorrow. Joe: It sounds kind of selfish, is it? Michael: Define selfish. Joe: Oh, doing something for yourself first. You should always think about giving, first? Michael: I think that's the way it works. Remember, it's this thing like teamwork, where it's selfish, but it's not against other people. Basically, Kaizen teaches you three things, essentially. One is autonomy in solving your problems, selfish. Two is forming your own vision of where you want to take your job or your department which is about other people as well. This has some element of leadership. And three is in order to achieve these two Copyright Business901
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Implementing Lean Marketing Systems things, building relationships because Kaizen improvement only happens within a relationship. So you are working for yourself by working for other people. Again, how do you succeed? You succeed when you are better with your customers and better with your suppliers. Then you succeed but everybody succeeds. For instance, one of the people I work with is a guy who works in a hospital. We're going at this completely different from everywhere else, it's a hospital. He's an administrative director and the first thing I said to him was "Build relationships with surgeons and nurses. Build the relationships and within these relationships have the improvement. Use improvement opportunities to deepen the relationship." So of course it's selfish. He's doing very well. In his hospital there is an opposition between the administrative staff and the medical staff, they all hate each other. And this guy is walking on water because he has friends everywhere. He can talk to surgeons and talk to nurses because he has carefully nurtured these relationships by taking them and solving one problem at a time with them. Of course when you solve real difficult problems with somebody you have trust. You have a deeper relationship. When you have done this repeatedly, you're very comfortable with them. So yes, absolutely it's selfish. It's very selfish. It's selfish in a strange way. It's selfish in a way that you learn to create less waste for other people so they value working with you.
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Implementing Lean Marketing Systems Joe: Now, in the Toyota culture is Kaizen practiced like that? Is it practiced on an individual basis? Michael: Oh yeah, I'm definite about this, yes. Again, you have very different stories according to who your coordinator is. In some cases it's a very pleasant experience when the personalities click. And in some cases it's a traumatic experience. For the same person they also have several different coordinators, or different bosses and they can have both. Sometimes they have a great experience and sometimes they have a traumatic experience. But very clearly they're asked as individuals to do Kaizen. That is, there is no debate here. Joe: Now at a higher level, you've talked a little differently about Kaizen. You've looked at it at an organizational level. Could you just touch upon that a little bit? Michael: Well, if you take this idea that what is the waste that you create, if you're the CEO of a company, can you imagine the waste that you create by your technical decisions when you decide suddenly to switch your supply base, when you decide to transfer the products to some other place because this is not working, delivering fast enough? All these decisions that CEOs make are based on, in our culture, are based on the notion of creative destruction. If something is not working well enough, let's replace it with something newer that works better and burn it. It works. It works. I have no argument against it. It's been working wonderfully in the U.S. where it's done with more ĂŠlan. It works fabulously but it's also extremely wasteful. Copyright Business901
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Implementing Lean Marketing Systems When CEOs learn to be more rational and empirical about their decision making because they use these Kaizen events as learning labs and they start crafting their strategies more than making big swings, the company starts progressing in the direction very strongly. But you don't have as much...you have the creativity but you don't have as much destruction. So in a strange way, what Lean gives you at a very high level is this sweet spot between flexibility and efficiency. This is where usually companies are stuck, between complete flexibility but it's a big mess and huge muda, or efficiency but it is very rigid because everything is routinized and then you can't cope with change. What Lean gives you is you can have both. You can have your cake and eat it and the smile of the baker. You can have both. You can have it. And this is what you try to get. You teach people to deal with change in small ways and you move them in changing big ways. So this is what you seek at a senior level. This is not Kaizen as you and I would do Kaizen at our jobs. This is more Hansei, this is reflect and review. But we use the Kaizen of individuals to test our policies, to test our strategies and to constantly explore where we want to take this. Joe: So when you talk about Hansei there, is that something that we all should be practicing, though? And do we have time to do that? That's the big thing; Kaizen spirit, continuous improvement, putting yourself first, if you do all that, means we've got to have slack time to be able to do all that. We can only operate at 60, 70 percent efficiency - we've got to have slack time.
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Implementing Lean Marketing Systems Michael: I'm not sure it's a question of time. We have a lot of time that is also thinking time. So we are all stuck in traffic. I'm sure you are. We all take, planes and trains and metros. We have plenty of time. I think it's more can we face our problems that's difficult. I'm past 45 and I'm still working with my dad who is my sensei, imagine that. Now I have a kid of my own. And it's beautiful because I've got it figured out. I mean it's "Oh, Dad, come on, you're ruining it. Dad you don't understand. It's not my fault. It's so unfair. " This is of course what my kid tells me but then the funny part is, I can hear myself with my dad, still now at my age when he makes a remark, and of course he's got his own inimitable style of making remarks, but when he makes a remark I still react like this "Dad, you don't understand. It's not my fault." I think that when you take the scientific method you accept that when what happens confirms what you already knew, when it went well, you haven't learned anything. And you also accept once and for all that when things don't go well, you're learning. The older you get, learning is not a pleasant experience when it's happening because it's usually things are not going the way you thought they should go. It's usually very uncomfortable. Once you've accepted that, this is the source of your Hansei. And it's your break away from this thing "Dad, you don't understand, it's not my fault." You break away from this once and for all. And you say "Well, it's not a question of fault. Something here happened that I didn't see coming. Things didn't work out the way I planned. "
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Implementing Lean Marketing Systems It just happened very recently to me. I had a workshop, actually, in the U.S. I had a workshop. I'm from Europe; it's a very different culture. The workshop, which I was very confident in the workshop and it didn't happen the way I thought. It was not a particularly pleasant experience, but it's always very interesting and you get to that stage of mind when you say "Well, fine." There's no ego in it. Who cares? This time is past. But what happened. It's very interesting because with the workshop organizer we drew very, very different conclusions. So here is where the Hansei is. The Hansei, I don't think time is the issue. I think we had plenty of time to do it. The answer is confronting our inner child and saying "Dad, you don't understand. It's not my fault." You confront this and say "No, of course it's not your fault. But you were in there, so you were a party to whatever happened. And you didn't see it coming. How come? Let's explore this." Take away all the guilt and all the blame, no blame, no guilt. That's the point. But simply think "My mental model didn't compute this that happened in reality. This is interesting because it will enrich my understanding of reality." Joe: I think it's interesting because it takes a pretty mature company to do this, doesn't it, or a pretty mature set of individuals maybe? Michael: It just takes one, the CEO. Joe: And from that... Copyright Business901
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Implementing Lean Marketing Systems Michael: When the CEO starts driving down to the company, the role model is very strong. Then those who can't cope with this leave and all the others get it. Joe: I wanted to ask you about some of the other companies in Japan that practice Lean or practice TPS, because it's called the Toyota system. Doesn't Honda practice basically the same thing? Aren’t there other companies that model the Toyota system? Michael: Honda is very strong on this, very strong on this. Joe: Are they as successful or do you look at them, let's say, as successful as Toyota in their own way? Michael: Oh absolutely. I'm not a car buff, but people who I know who are think they make the best cars in the world, absolutely. I think the differences that I see are very minor. I've not studied the case of Japanese companies in detail at all, this is just my opinion. But the difference I see is that many of these companies understand this notion of Kaizen and personal Kaizen, but Toyota is the only one which has a system to direct it, which is the judoka, heijunka time and standardized work and Kaizen as a system. So it gives direction to the efforts. I think that's a big difference. For instance, as I understand it, Honda doesn't practice heijunka. Of course when you don't practice heijunka your Kaizen is directed in other things. But in the old days they are still two different things, which are production technique and manufacturing technique. Production technique is making the part, making the parts that make the engine, so making the machine that makes the parts that makes the engine. Copyright Business901
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Implementing Lean Marketing Systems I worked with suppliers who are working for Honda, and these guys are such incredible engineers that sometimes we came up with some over complex solutions. They never stopped us because it was fine for them. We couldn't realize it in the end. But it was fine for them. They were so good. They were really very good. But in manufacturing time of service, which is the whole flow of cars, the whole flow of product and so forth, they weren't that great. They weren't interested that much. I think, again, back to the discussion that we had, there is individual Kaizen and there is the alignment of your Kaizen with the overall challenge. This is important because, yes, the CEO defines the challenge. And in TPS, in Toyota, the TPS defines the challenges. It's defined by reveal your mistakes, pool, and reduce the lead time. What I practice with CEOs comes in four themes which is very straightforward, is one, protect your customer, two, control your lead time, three, reduce your lead time, four, realize all the cost savings from eliminating waste. So we have a direction for the challenges and kaizen efforts. Joe: After you do this for five or 10, 15 years, you should be getting pretty good at it. There shouldn't be that much improvement left, should there? Michael: Well, I'm sure you've noticed, Joe, that the world is exactly the way it was 10 or 15 years ago. Nothing has changed right? Joe: Well, it's changed a little. Michael: It's changed a little. So what doing this for a long time develops in you is a true appreciation for how much things change and how much things are interconnected. And Copyright Business901
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Implementing Lean Marketing Systems this is what is the constant mystery of it all is that there is always something to improve because you turn your back on reality and it went a way you didn't expect. Also you develop a much stronger appreciation, a deeper appreciation of how things are interconnected. So in the biggest room there's still the room for improvement. There is no debate there. Joe: Is there something else on Kaizen that you'd like to add or is there a certain aspect that we didn't ask about? Michael: No, I think we've covered a lot of ground here. I think this is...I hadn't thought about this individual Kaizen, it seems obvious. But yes, I think you're right there is something here. This is probably some element that we should develop on Kaizen as a personal development, self-development thing, which is without the Sensei or without the structure of the company, what would it mean? I've not thought about this at all. What I really mean, how do you develop your own Kaizen? I think Kaizen, you can probably talk about it forever. The point is you need to practice it. And you need to practice Kaizen every day. In any situation, and I'll conclude with this. In any situation, first, what is the problem you are trying to solve? What is it you're trying to do? Secondly, is there a standard there? Is there a standard? Do you know a standard? If you don't know a standard, what would the best in the world be? Thirdly, if there is no standard, what would be the test method to your solution? And then try something and see where you get to. Copyright Business901
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Implementing Lean Marketing Systems Joe: Yeah, I would think that there should be. It's interesting, because you look at all the different books, the "Toyota Culture," and different books that are written about, I guess, looking at employees and how to handle employees, line workers and department heads. And how to hire people, what type of culture you're looking for. But there really isn't as I say, a book or something that I think about that is written from let's say the employee's viewpoint looking back at Toyota or looking back at TPS or looking back at Kaizen from his viewpoint, from his Gemba. Michael: There is one that comes to mind, which is called "One Team on All Levels." And this is a very interesting book because this is a collection of reflections of team members and team leaders in Toyota's Kentucky plant. So you have 300 pages just built of collections of what it was like to work in that plant, or what it is like to work in that plant. It's called "One Team on All Levels," and it's a pretty unique book because it really is employees' perspectives because it is written in their words. I think that "Toyota Culture", Jeff's book, "Toyota Culture" does, in some parts of it, does a fairly good job of going into that, particularly in the description of the suggestion system and the description of all the efforts around the plant that Toyota involves people in and work in the community and all these things they do. But you're right, overall it's not something that is really stressed. The one book that I would really recommend on Kaizen is Isao Kato's and Art Smalley's "Toyota Kaizen Methods" workbook. Again, this is a very surprising book because it goes back to what really Kaizen is within Toyota and it's stripped of all the bells and whistles and weird interpretations. It goes back to the core. Copyright Business901
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Implementing Lean Marketing Systems And for anybody doing Lean it's been drawn. It's a hardcore book. But it's very refreshing to go back to, really, the original Kaizen methods that were developed in the '60s and '70s in Toyota. I think it's a very healthy book to read to ground yourself again in the reality of what it is. So I would really recommend that. Joe: Well, I think that it's a very nice way to end it because that is, to go back and reflect on what grounded those principles and what grew that company are some real basic principles based on individuals. Michael: A company is nothing more than a collection of individuals. It's a football team. It's a football team and each player matters and how they play together matters and how they are led matters. Those are the three ingredients. But if the guys can't run, they can't run. If the guys can't catch the ball or whatever you want to do they can't catch the ball. And at the end of the day in a factory if they can't put the bolts in right, they can't put the bolts in right. There is no way around it. So this is where, really, value is added that matters. So if I have to say something is the breakthrough moment is when you realize not the muda you are being imposed on but you realize this notion what is the muda I create by my technical point in my job. It's not that I'm not doing my job right, understand me. I'm doing my job perfectly well, and in doing my job perfectly well, I create some muda. As a consultant, if I get it wrong in what kind of problem I tackle or even whenever I put one more document on that wall that you have to track, even if it's totally necessary, it is still muda. Do you see what I mean? Copyright Business901
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Implementing Lean Marketing Systems I am generating muda for others, so this is a big thing. To me, that is a breakthrough moment. Joe: So what I'm looking at is my handoff to other individuals, I should be making their job easier and easier for them. Michael: Absolutely. Joe: And that's what I'm looking at is my handoff to those other individuals. Michael: That is to me the definition of a standard. A standard is an agreement of the muda-free way of doing the job or the less muda way of doing the job. That's to me what a standard is. We agree that to minimize the muda that comes from doing this job we should work in this way. That is a standard. Joe: It's also recognizing line of sight, too, of who all that I affect, because I don't think we know that, do we? Michael: Exactly. So anyway it's fascinating working with engineers a little bit. Some don't even realize they're working with a spec and then they're working with a purchaser but they don't work with the...and then they working with the manufacturer and then they're working with the distributor, but who is the customer? I have hours of discussion with engineers about the end customer who uses the products and they're usually very remote from them, people who build airplane seats or people who build parts and machinery and engines. They are so far away from the person who actually will drive the car or sit in the plane. Copyright Business901
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Implementing Lean Marketing Systems We need to bring all this to create this line of sight, to create this line of sight, to realize that when you make this technical decision for this reason from your point of view you may be right, but the guy who is going to be sitting in your seat is going to curse you for it, absolutely. If I go into Kaizen I think the one place to start is this very simple thing. Let's look at the job, let's detail step by step. Let's look at the muda we create. Let's figure out some ideas, very simple ideas, that we could minimize that muda. It's as straightforward as this. And just by doing this exercise you will discover what Kaizen is. And of course, this is when you hear the "Oh Dad, you don't understand, it's not my fault" problem because this is what you're starting to say about every line. This is good, this is good. Hang on in there, just don't put the paper down. Push for that role and realize that it is not your fault but maybe some things you can do could minimize some of this. And this is when you enter this big room for improvement.
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Implementing Lean Marketing Systems Joseph T. Dager Implementing Lean Marketing Systems Ph: 260-438-0411 Fax: 260-818-2022 Email: jtdager@business901.com Web/Blog: http://www.business901.com Twitter: @business901 What others say: In the past 20 years, Joe and I have collaborated on many difficult issues. Joe's ability to combine his exper tise with "out of the box" thinking is unsurpassed. He has always delivered quickly, cost effectively and with ingenuity. A brilliant mind that is always a pleasure to work with." James R. Joe Dager is President of Business901, a progressive company providing direction in areas such as Lean Marketing, Product Marketing, Product Launches and Re-Launches. As a Lean Six Sigma Black Belt, Business901 provides and implements marketing, project and performance planning methodologies in small businesses. The simplicity of a single flexible model will create clarity for your staff and as a result better execution. My goal is to allow you spend your time on the need versus the plan. An example of how we may work: Business901 could start with a consulting style utilizing an individual from your organization or a virtual assistance that is well versed in our principles. We have capabilities to plug virtually any marketing function into your process immediately. As proficiencies develop, Business901 moves into a coach’s role supporting the process as needed. The goal of implementing a system is that the processes will become a habit and not an event.
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