Kaizen Spirit

Developing a Kaizen Spirit Guest was Michael Balle, co-author of The Goldmine and The Lean Manager

Business901 Podcast Transcript

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.

You can find out more about Michael at MichaelBalle.org

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Joe Dager: Thanks everyone for joining us. This is Joe Dager, the host of the Business901 Podcasts. Participating in the program today is Michael Balle, the managing partner of ESG Consultants. He is the co-author of "The Gold Mine," a best-selling novel of a lean turnaround and recently "The Lean Manager: a Novel of Lean Transformation" both published by the Lean Enterprise Institute. Michael, could you just tell me about ESG Consultants and your new book "The Lean Manager?“ Michael Balle: Hi everybody. ESG Consultants is really a name for my father and me as consultants. I think my father, Freddy Balle, is somebody important in the lean world in Europe, because he discovered Toyota when he was an executive at Renault in 1975 and has been studying them ever since. When he left Renault to become the Industrial Vice President of the supplier, he was the first person to implement a Toyota like system, production system, which is how he met Dan Jones who wrote "The Machine That Changed the World" and "Lean Thinking: Banish Waste and Create Wealth in Your Corporation" Because Dan saw the first implementation of a TPS like system outside of Toyota.

So, when my father retired, I was an academic and I had been studying lean and business systems for many years. We decided to create this consulting company together. And as part of our work together, this is how we came to write these two books.

Joe: The first book, "The Gold Mine," was about a Lean turnaround. Was that based on a true story?

Michael: Well, it's based on several true stories. The actual story and the context, that is fiction, but what we tried to do is to make it feel real is to take our experiences in the shop floor with a variety of people is to put it together in a narrative, as a novel. In fact, originally, what we had in mind is to write a straight-forward business book. But we found

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that lean doesn't fit very well with a linear discourse, because the main theme of "The Gold Mine" is how lean is the system, and all the components feed into each other. It's very hard to describe. We found that writing this novel, we could have conversations where the back and forth in the conversation shows the systems as effectively. The odd thing is that when we wanted to write a sequel, which is more about the management of effective lean, we also started wanting to write a straight-forward business book. The exact same thing happened. I think I came up with 17 earlier versions of this book. So eventually, we wrote the sequel to "The Gold Mine." And again the novel form was more practical to have it best convey the ideas across.

Joe: When you talk about a system, one of the first things that I think of is the tools that are used in the system. There's been a big debate lately on tools and the thinking processes of lean. The tools that are in lean can kind of make sense out of the system to me but you may differ on that or you may agree with that statement. How do you relate the tools and the thinking processes of lean?

Michael: I think that's a very deep question. There seems to be yes, you're absolutely right, this tendency at the moment to oppose the tools. I would not hold with that at all. I would not agree with that.

I don't know if you know this Zen story: when you haven't studied Zen, you see the mountain as a mountain. Then if you really study Zen very hard then you no longer see the mountain as a mountain. But when you understand Zen, you see the mountain as a mountain. I feel the same thing about the tools.

When you first study lean, you start with the tools. Then you study it more and you get into something that is about thinking, or philosophy, or whatever. But when you do it a lot, you again think about the tools. I think the tools are essentially very important. However, I have a different take on what the tools mean.

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The way I see lean as a management system is essentially a knowledge transfer system; it's a training system. So what the tools are, the tools to me are self-study exercises to understand your processes better, it's like a microscope or a telescope. The tool is a way to look into problems and they never solve problems by themselves.

Many people have used the tools or have wanted to implement some sort of solutions to these tools thinking it would make them better. I think that's kind of beside the point.

What makes you better is using the tool rigorously, so you understand your problems and your own processes and then, with hard work, take the time to figure out how to solve them. It's this process, it's the process of solving your own problem that empowers you and which leads you to create better and more performing processes. Am I making any sense? Does that make sense to you?

Joe: Is that kind of what the lean manager does? Does the book go into the thinking processes and stays away from the tools a little bit?

Michael: No, actually one thing we try to do with the lean manager is again try to establish this correlation with the tools and thinking. It's not just thinking the managerial behavior to sustain the use of the tools. So, the lean manager doesn't take exactly the same tools as the Goldmine did, it takes another aspect of the same tools. You'll still find a lot of tools in there. What we try to demonstrate is a kind of management attitude towards the tools you need to get the lean results.

Joe: Do you talk about the leadership mostly in "The Lean Manager" or do you get into the middle management side of it?

Michael: Well, there are two main characters in "The Lean Manager." One character is a CEO and it's a lot about his leadership about transforming this big company. You have a lot of leadership elements.

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On leadership and lean I would really have to recommend to everybody Jeffery Liker’s new book. He focuses specifically on this and it's going to be an absolutely fantastic book on lean leadership.

This CEO character we have in "The Lean Manager,� it's all about lean leadership. The second main character we have, which is one of the plant managers, actually is the hero of the book, and here he's just a manager. So there are some elements of leadership but for him mostly learning to manage the plant in the lean way. So we have both items in the book.

Joe: How does someone get started with Lean? Can you go in there and say, "OK, we're going to become a Lean company now." The manager sits there, and it's not that he resists it, but he looks at the fact that I have to get X number of product out the door today. I kind of resist change at the managerial level because you want me to institute this, but I still have to get product out.

Michael: I share your pain, brother. I completely understand this. I am going to try to answer this question but it's very difficult. First, I don't believe everybody should start Lean. I think Lean is a method to make you more effective than your competitors on your market. So Lean is not something you have to do. Lean is something that some people want to do, to beat their competitors.

It's going to take extra work, certainly at first. And why shouldn't it? Why should we think that beating out competitors on our markets is easy? Of course it's not. I mean everybody's smart, everybody works hard.

Joe: Who is Lean targeted too?

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Michael: Lean is targeted to a certain kind of person who actually enjoys learning.

Somebody who is committed to self development as opposed to just doing things and running things as they are. I think this is very central point in the book. It's central to the characters and to the relationships of the characters that at the end of the process, the people who end up working together whatever their differences in personalities, and attitude are those that are equally committed to this self-development through the Lean thing.

And that's exactly what you said. Somebody who would do well with Lean is somebody who realizes that in their job; there is running the basic job, fighting the fires and doing self improvement activities. So some people think I'll do these improvement activities at end of the day when I have some time. But of course you never have time. Some people have the nerve to say, "No, I'll dedicate some time to do the improvement activities whatever happens." It's tough. But when they do this, they also find the process gets better, they have less fires to fight and overall their problems decrease, which gives them more time to dedicate to improvement activities.

Joe: I'm going to play a little bit of the devil's advocate here. And say, here's Lean, but then let's say I have five consultants out there. One's a TQM consultant, one's a Systems Thinker, one's a Six Sigma, and another is a Theory of Constraints guy. All have different methods, different tools to use. Why would I choose Lean?

Michael: I think it is a very valid question. I would not choose any of them. So put it that way, I think all the methods you mentioned are process consultants. Lean is a big shrinkage for consultants. Lean was not made for staff people. Lean was not made for consultants. Lean is a method for line managers and is being developed as such by those who invented it.

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So here is the take on it. All of these methods have many outlooks in common, but there is one big difference. On the one hand there is Taylorist methods, which is a broad umbrella in methods in which you take specialists, such as your consultants or your staff specialists, you go and see how people work. You really find out what is better way to work. Then you get them to follow the new process, which could be through a computer system, or through a work organization or through a six sigma project, or whatever you have. But, you separate the people who think, from the people who do.

The Lean approach is radically different. The Lean approach is you take a professor, a Sensei, who will take the manager through a certain number of exercises, so that they themselves with their teams, understand better the problems and their processes, and they learn how to solve their own problems. To me, this is the excitement of Lean, is this empowering aspect that is, it is not easy but if you teach people, you don't solve people's problems for them. You teach people how to solve their own problems. And in doing so, they learn how to make better decisions which leads to better performance. That's one aspect of it.

The second aspect of it for me that is very important is that if you are a CEO, Lean has a vision, an industrial vision working. I can think of several Lean plants. I can think of a few Lean companies. But let's say it's at the plant level, because then I can visualize many Lean plants. I cannot think of the Six Sigma plants. I cannot visualize a system thinking plant. And I have to say, I've got a soft spot for system thinking, because my first management book was about system thinking. So, the tools are one thing... What makes Lean different is the system. It's the relationship between the tools I've built up, and this complete industrial vision of an ideal of what we want to do with an industrial system, and a method of how to get there. Does that answer your question?

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Joe: Yes it answers it very well, because it truly does clarify a lot of things. I can see using Six Sigma, especially on a project basis. I can see using Theory of Constraints within a Lean or a Six Sigma project. The System Thinking is a great way to look at something, but not necessarily as a process, maybe for discovery. However, to have a System Thinking plant, doesn't make sense to me. Is that what you explained to me?

Michael: There are two elements in the Lean framework. I think one of the things that happened is that starting with the "Art of Japanese Management" and everybody realized something was going on out there. With Jim and Dan's book on "The Machine that Changed the World," everybody accepted more or less now, that you need some sort of continuous effort to work. That's OK. Actually that makes sense because we have a long history of Taylorism, in which we did improve activity year in and year out by fixing some processes and innovation. Lean gives you more than that. First, Lean gives you an ideal; it's a commitment to an ideal. This ideal is zero defects, zero accidents and incidents, 100 percent value added, one by one product on demand in sequence, high employee involvement in terms of suggestions.

It's an ideal. This grows an ideal for any industrial system. We want to get there. And the second thing is we get for you with a system aspect, is exercises for you to get there in your own way. And these exercises are related. There's exercises on how to self measures, there's exercise on your flow, there's exercise on how to deal with your project, there's exercise on how to deal with your work station.

You should follow these exercises. The method will take you step by step towards this ideal. I don't believe that you have any of them in the other improvement methods.

Having said that I have nothing bad to say about the continuous improvement method, I mean, by all means doing something is so much better than doing nothing and you learn from everything you use. But what to me are specific to Lean are the system methods.

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Joe: To me that is what helps me visualize the process and what to do, and how to do it, and apply it so quickly. When I look at that system, it allows me to apply it because I know which tools to pull out of my tool belt and use.

Michael: I think you used a very, very important word in there which is visualize. I think that Lean also has a significant difference with the other tools you mentioned. For instance my focus on Lean is very much on quality first, before I even go to explore the tools. But, I would say Lean and quality is TQM without the paperwork. The steps to me of Lean, in terms of management method are one first you go and see the initial form.

Second you visualize your process. This is not with indicators on board; this is about making the process steps visible. So just like a drive in a system it's obvious to see what the next step is, and when you should trigger it.

You visualize things in a way that reveals your problems, and here I have many stories about people who manage to visualize things in a way that they hide the problems. But, no, you visualize things very clearly to see the problem so you can react immediately to get back to the standard condition. This allows you then to chose one problem from the other and just solve them one by one.

From then on, from solving problems you will get a change in your policies, and improve your general policies once you've understood the consequences of these policies on your operation.

So here, as opposed to our classical study methods that you mentioned, I've done some fixing my work, I've done some systems thinking work, and I've actually done seminars where it brings the feedback loop in the system. I've written two books where they appear. I've done some engineering work. I wrote a book about this as well!

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Studying what data was doing with my father's plants when he was in Valeo, and then the consumer relationship with Freddy became the CEO of the supplier. The thing that was so obvious at first, and took so long to understand is doing this is where the people are, because you visualize these problems in practice. You don't collect data, you do collect facts. You create practical situations. When you see the people stepping over the white line on the wrong side of the road, you can talk to them about it.

Suddenly, and this is something I've never found in any of the other improvement methods, suddenly you've got this platform for direct discussion with the operators themselves. You're in a different world because now they understand what you're all about. You visualize it and then you start talking to him, "why did this happen?" "How come this happened three times?“ The relationship changes radically. The kinds of solutions you have changed radically as well. This is the fun of Lean, this is another world, it's this on-site communication with the people who do the work themselves, and engaging them in terms of coming up with clever, Leaner systems that perform better for customers. That's really, to me, the uniqueness of it and the fun of it.

Joe: I think that's a great description of it, I really haven't heard someone describe it that well. Is this the message you try to get across with “The Lean Manager?” What we just discussed an overview of the book?

Michael Balle: Freddy and I try to write them as novels but also as reference books, so we tried to do it in "The Gold Mine," I don't know if the reader would agree but, to be a record book of the different elements of the TPS and how they make sense in practice.

In the "Lean Manager" we try to have a reference book of all the elements of lean management. But the core of it is, what we just discussed that's, how do we create organizations in which everybody solves problems every day. In which people see the very first starts of problems instead of waiting for them to become full blown fires, they

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build it from degrees and react and they reflect deeply and they resolve the problem. And so create that in an organization.

I think one of the great things about writing these books is all of the conversations you have after the book because people will talk to you, they'll read the book, they have feedback and they measure progress and you say, "oh, wow, if I had thought about this before I would have put it in the book, now I have to write another one," and one of the things, that is really coming strongly from all the conversations around "The Lean Manager," is how much leaner the training systems, how much Lean embeds in the day to day process training opportunities.

Now, let me take an example, for instance, an andon system, what an andon system is, is when operators have a problem, they pull a rope, have lights, lights with a station and their team leader has about a minute to two to react and if not the line stops. Now when the line stops it become a big brouhaha. The purpose of the system, when you're watching the plants is that these lights come on and off, on and off, on and off, all the time. If you stand there and watch it, it's on and off, on and off, all the time.

What happens is that every time an operator has a doubt, they pull the cord, the team leader comes and what the team leader does is to check whether there's a problem or not. We would see this indication or not, does this product feel right or not, and the team leader being more experienced, they have a better judgment on it. The same thing takes place whether the operator has followed the standardized steps that work, which is a set sequence of steps for the problem, and really, what this andon system is, which I always go to for management reactivity, but in fact it pertains, this is to build in the normal routine way of sustaining a system for training because it creates all these training opportunities, through their working day.

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I think this is so incredibly powerful, this vision we can have with lean systems of increasing our competency, increasing our training without having to take people off line, without having to get to classrooms, but by building it into the way we work a process, and I think this is very exciting and I'm working with some people on how we apply this in engineering. I think this is very exciting because it does create a different kind of organization.

Joe: I think that's a great way to put it. I really enjoyed that description of it because you don't hear it put that way, you always picture the guy that's pulling the rope with the whole line stopping behind it and everybody's waiting because they found the problem.

You explained it as a continuous and a training process where it's going off and on and much more of a continuous process of training, which is excellently put because the other day I heard someone say, or wrote that "I worked at Toyota for X amount of years and I only attend two Kaizen events," we did Kaizen every day.

Michael: Exactly, this is actually funny because I remember being in the Toyota plant and I'd already written "The Gold Mine" and I'm wandering around looking at pictures of guys and going, "mm, very good for management reactivity, yes?" I said, "no, operator training," so of course I don’t hear him, "you mean management reactivity?" I said, "no, it has nothing to do with management reactivity, it's operator training," so we're having this back and forth and he says, "OK, what do you mean by operator training?"

So, he says "this is an opportunity to have a conversation about work standards and about standardized work with operators, conjointly. Now when the line actually stops, then yes, it becomes a management reactivity issue, but we don't want to stop the line."

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Joe: I think so many times we look at Lean and we look at Kaizen events and this improvement process and we're going to go through this stage and improve, but it's really not about that, it's really about Kaizen, it's about Kaizen all the time.

Michael Balle: I think, one of the things that Lean does is it's all about problem solving but it understands problems in greater detail because, everybody thinks they're solving problems every day and they are in most jobs. But the first thing we need to understand is there's work around, there's putting off the problem from day to day. I just saw that recently, when you do service, you've got the wrong parts in stock, you need the parts so that you canibalize a machine that's being overhauled to put another machine on, this is a work around, it doesn't solve anything, it puts off the goal. Most of the things people do when they're solving problems every day they tend to do this.

Then Lean has another thing which is this calculated thing which is if you understand what standards are, how we should be, how the process should work because it's very clear, then whenever we see a variation from the process we react immediately. So if we see the right parts in knowing the stock before waiting for it to hit us, we react immediately and we learn to react to this.

Then, there's a third kind of problem which is if this happens very often, then market conditions have changed, sometimes we need to go into it more deeply, into some of the root cause analysis tells us how it's really going on, and Lean has this whole A3 methodology of going about it.

The fourth thing I would say is what you mentioned about the Kaizen event, in some cases there's nothing obviously wrong with a process, but we don't think it's perfect, it's never perfect, we want to learn more about it so we will use a Kaizen event, we will use

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any of these three types of problem solving, I think that what's really in the Lean process is a much finer understanding of what is the problem, and how to treat it. The Kaizen event has a role in there but it's just one aspect of it.

Joe: How can someone get a hold of you?

Michael Balle: Well, MichaelBalle.org. And again, writing books is fantastic because it's like you're having a conversation with people you would never meet or never know and if we count all the, if we count all the various translations of “The Goldmine?� I think we have sold seventy thousand copies worldwide in various languages and this is fantastic.

This is fantastic because you're connecting with seventy people. This is amazing on a quite demanding subject matter. This is not entertainment this is actually quite hard work. The fabulous thing is sometimes they talk to you, they write back and you exchange the ideas and that's part of the process I really love. So I really have, the one thing I would say is, please, get the book, read it and tell me about it and if you disagree, the more the better, I am French, so I'll argue the legs off and then persuade and go for a walk afterwards, so please disagree, or comments or illustrate and this is how we build this base of knowledge and interest in Lean and that's the fun part. I think Lean is hard but Lean can be fun as well because we're always exploring new aspects, new sides of processes and people and that's very exciting.

Joe: Yes, I didn't mention this before, but your last book, "The Gold Mine," won the Shingo prize.

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Michael: I think that the publisher is dealing with that side of it. I'm very honored by the Shingo prize but, again the greatest reward from this is when somebody comes up to you and says, "You know, this thing you say in the book really got me thinking.� I think this is, to the author, this is a magical moment, prizes are very nice, they're author recognition.

But it doesn't have the same, to me anyway, the same emotional impact as the fact that somebody, you know the best thing that happened with "The Goldmine," is that a number of people said, "we read the book in our organization and we read it together, and we tried things and it really made us understand some aspect of Lean that we hadn't understood before." When you hear people say that this is great, this is wonderful.

Joe: I would like to thank you for your time, Michael it's been very entertaining. The podcast will be available on the Business901 iTunes store if you want to download it to your iPod, and it is also on my Website.

Michael: Thank you for the opportunity, I really enjoyed it.

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Joseph T. Dager Lean Six Sigma Black Belt

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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 expertise 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 and a certified coach of the Duct Tape Marketing organization, 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. Part of your marketing strategy is to learn and implement these tools.

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