Lean Enterprise Transformation
Lean Global Network
www.lean.org
November 2014
Lean Global Network
The Lean Global Network
• LGN is a network of mission-driven institutes taking
responsibility for bringing lean thinking and practices to
their countries and the world
• We believe lean thinking and practice can:
– Improve the performance of organisations and raise living
standards
– Enable prosperity while minimising resource use and
environmental impact
– Provide more fulfilling work and personal development for
everyone
– Enable consumers to create more value (consumer at center of
value-creation)
Lean Production, Lean Thinking, Lean Practice, Lean Learning
Timeline: Lean
NUMMI
Experiments in TPS and
other Toyota Way Pieces
12/12/1984
1950
1950
Chief Engineer
OMCD
1955
1968
1950
1950
Rebuilding Japan (TQC,
TWI, PDCA)
Incubation
Diffusion and Dilution
Future Direction
1956
1962
Toyota Crises –
Financial loss
and recalls
Machine That
Early Explorers
Changed
the World
to Toyota City
1968
1974
1973
1980
1st Boom of learning from
Toyota
1986
9/17/1988
1992
2nd Boom - Lean
Production, IMVP,
consultants
11/6/2014
2008
1990
1980
A lean future?
1998
2004
1/1/2004
2010
3rd Boom - Toyota Way
2014
Today
1950 - 1980
1984 - 2014
11/6/2014
john shook
A Simple Definition of Lean
Thinking & Practice
Systemically develop people
and continuously improve
processes to create value and
prosperity while consuming
minimum resources.
Every Organization Must Address
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• Purpose – Provide value to customers (costeffectively to prosper, etc.).
• Process – Through value streams that are
designed, operated, improved.
• People – By engaging and respecting
employees and other stakeholders.
 Aligning purpose, process, and people is
the central task of management.
People & Process
Balanced by Leaders
8
Lean as a
Social & Technical System
Social
Lean as a
Social & Technical System
Technical
Process and People
• We should teach the art & craft of science.
• Science will give us a good technical
answer.
But…
• being technically “right” is only half the
“battle”.
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People & Process – aligned by
leaders to achieve purpose
Lean Transformation
Aligning:
•Purpose
•Process
•People
to create value
How to
improve
the work?
WHAT
is our
PURPOSE?
How to
develop
the people?
What situational problem
do we need to address?
What
leadership
behavior and
management
system do
we need?
What is our BASIC THINKING??
Lean TransformationModel
Lean Transformation
VALUE-DRIVEN PURPOSE
- Situational Approach “WHAT PROBLEM ARE WE TRYING TO SOLVE?”
PROCESS
IMPROVEMENT
Continuous,
practical
changes to
improve the way
the work is done
Behaviors
MANAGEMENT
SYSTEM
CAPABILITY
DEVELOPMENT
Sustainable
improvement
capability
in all people
at all levels
Basic Thinking, Mindset, Assumptions
That drive this transformation
Transformation Questions
1. Have you made the purpose or mission clear to everyone? Does
everyone know their value to create, their problem to solve?
2. Have you defined the work to be done? Is it being improved?
3. Do you have the necessary capabilities? How are you developing
people?
4. Do you have the management system and do your leaders exhibit
the needed behaviors (to develop capability to do the work to
accomplish the mission)?
5. Do you understand the current basic thinking
(mindsets, assumptions) and grasp its
impact on the organization and its culture?
What are you going to do about it?
Transformation Questions
1. Have you made the purpose or mission clear to everyone?
Does everyone know their value to create, their problem to
solve?
2. Have you defined the work to be done? Is it being improved?
3. Do you have the necessary capabilities? How are you developing
people?
4. Do you have the management system and do your leaders exhibit
the needed behaviors (to develop capability to do the work to
accomplish the mission)?
5. Do you understand the current basic thinking
(mindsets, assumptions) and grasp its
impact on the organization and its culture?
What are you going to do about it?
Transformation Questions
1. What is our purpose or what problem are we
trying to solve, what value to create?
WHAT
is our
PURPOSE?
What situational problem
do we need to address?
What Problem are We Trying
to Solve?
Okay, so that’s where we need to go…
“Which way to
True North?”
Purpose Statement:
Newport News Shipbuilding
“We shall build good ships
here.
At a profit—if we can.
At a loss—if we must.
But always good ships.”
- Collis Huntington
(Now Huntington Ingalls)
Hoshin Process
Breaking Down Company Problems and Solving Them
at Each Level
Sustained high
performance
CompanyLevel
Division-Level Hoshin
Group/Individual
Problem Solving
21
Employee
Motivation
Purpose/Problem At Each Level
Each person with
responsibility
for his or her
situational
problem to
solve!
Transformation Questions
1. Have you made the purpose or mission clear to everyone? Does
everyone know their value to create, their problem to solve?
2. Have you defined the work to be done? Is it being improved?
3. Do you have the necessary capabilities? How are you developing
people?
4. Do you have the management system and do your leaders exhibit
the needed behaviors (to develop capability to do the work to
accomplish the mission)?
5. Do you understand the current basic thinking
(mindsets, assumptions) and grasp its
impact on the organization and its culture?
What are you going to do about it?
How to
improve
the work?
WHAT
is our
PURPOSE?
What situational problem
do we need to address?
Process Improvement…
What is the work to be done
in order to get there…?
Process Improvement at ALL Levels
Macro Enterprise System Level
Value Stream Level
Factory, Hospital, Office, Department Level
Micro Level of Each Individual Job
Lean Process Design
Give a good process to the people who do
the work…
Lean Process Design
Transformation Questions
1. Have you made the purpose or mission clear to everyone? Does
everyone know their value to create, their problem to solve?
2. Have you defined the work to be done? Is it being improved?
3. Do you have the necessary capabilities? How are you
developing people?
4. Do you have the management system and do your leaders exhibit
the needed behaviors (to develop capability to do the work to
accomplish the mission)?
5. Do you understand the current basic thinking
(mindsets, assumptions) and grasp its
impact on the organization and its culture?
What are you going to do about it?
How to
improve
the work?
WHAT
is our
PURPOSE?
What situational problem
do we need to address?
How to
develop
the people?
Capability Building…
What skills do we need to get the
work done…?
Lean Capability Development
“Make people as you
make product…”
Lean Enterprise
– the ultimate “social-technical system”
• The process of doing the work is integrated
with the process of improving the work, and…
PDCA
LEARNING CYCLES
t
33
Lean Enterprise
– the ultimate “social-technical system”
• The process of doing the work is integrated
with the process of improving the work, and
• The operating processes ARE people
development processes
PDCA
LEARNING CYCLES
t
34
Lean Tools and Lean Learning
The tools bring obvious “mechanical” or tangible benefits.
They are also frameworks to develop people AND make it:
– easy to see problems
– easy to improve
– easy to learn from
STOP! To build in quality,
to solve problems, to develop people…
Stop to Achieve Purpose, Solve Problems and Develop
Capability
•Design a routine – provide training
–Make success understandable and do-able
•Make it easy to see problems
–Anything that interrupts the routine
•Make it clear what to do for problems
–Contain and notify (“neither accept nor pass on…”)
•Make it clear what will happen after notification
–Help will come within the cycle of work
•Ensure problem-solving and learning
–Through structured routines for problem-solving and rapid cycles of
learning
Lean Tools and Lean Learning
The tools bring obvious “mechanical” or tangible
benefits.
They are also frameworks to
• develop people, and
• make it:
– easy to see problems
– easy to improve
– easy to learn from
Transformation Questions
1. Have you made the purpose or mission clear to everyone? Does
everyone know their value to create, their problem to solve?
2. Have you defined the work to be done? Is it being improved?
3. Do you have the necessary capabilities? How are you developing
people?
4. Do you have the management system and do your leaders
exhibit the needed behaviors (to develop capability to do the
work to accomplish the mission)?
How to
improve
the work?
WHAT
is our
PURPOSE?
What situational problem
do we need to address?
What
leader
What
behavior
and
leadership
management
behavior
and
system?
management
system do
we need?
How to
develop
the people?
Management, Leadership…
How will we manage the work?
What behaviors must leaders exhibit??
The Lean Leadership Challenge
• Enable each person to take
responsibility to solve
problems and improve his or
her work
• Align each persons’ work to
provide value for the customer
and prosperity for the
organization
Get the work done and Develop Capability
- at the SAME TIME!
 Begin with Yourself!!
Leadership
Styles
How to
improve
the work?
WHAT
is our
PURPOSE?
What situational problem
do we need to address?
What
What
leader
leadership
behavior
and
behavior
and
management
management
system?
system do
we need?
What is our BASIC THINKING??
How to
develop
the people?
Transformation Questions
1. What is our purpose or what problem are we trying to
solve, what value to create?
2. How do we improve the actual work?
3. How do we develop the people?
4. What role must leadership take and how does the
management system support the new way of working?
5. What basic thinking or
assumptions underlie
this transformation?
What basic thinking underlies all this…?
Does this really make sense
to everyone???
What mindset do we have?
What do we need?
What underlying assumptions??
How to Transform?
How to Transform?
It’s easier to act
your way to a new
way of thinking
than to think your
way to a new way
of acting.
Developing Capability
Implementing solutions to do things right…
versus
Testing to find things gone wrong
Design of Process,
Design of Work Experience
Basic Thinking – Lean Thinking
• Principle of “Just Enough”
• Practice of Questioning and Experimenting
– Structured Questions and Experiments
So, What Must Lean Leaders Do?
Establish alignment
around a vision to achieve the
purpose of the organization
Lead/support the creation of work
streams that flow value to customers
Lead/support the creation of systems
that develop people to take personal
responsibility to continuously improve
processes and solve problems
Lean Thinking
• Principle of Respect for
People
• Practice of Continuous
Improvement
Unending learning…to make things
better…in everything…everywhere
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