The High Velocity Edge:
Leadership, Innovation, and
World Class Competition
Steven J. Spear
Senior Lecturer,
Massachusetts
Institute of
Technology
Senior Fellow,
Institute for
Healthcare
Improvement
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© Steven J. Spear 2010
Outline
• Competition by innovation.
• Why look at Toyota?
• ‘Lean’ learnings…
• High velocity innovation
• Other examples
•Q+A
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1964 and 2010…
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Why Toyota?
Performance
-- Efficiency
-- Quality
-- Variety
-- Speed
T
T
GM
Ford
Chrysler
T
GFC
GFC
General Motors
Ford
Chrysler
Toyota
1965
1973
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1985
1995
2005
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Learn Learnings: Chaos Out, Stability In
Job Shop
to
Focus ed
Factory
Chaotic Push
to
Self P acing
Pull
Drill
Mill
Drill
Polish
Mill
Lathe
a
SHIP
Drill
Polish
Lathe
Mill
Mill
Drill
Lathe
Polish
Lathe
Drill
SHIP
Polish
Lathe
Requests
Drill
Schedule
Production Control
Drill
Polish
Schedule
Drill
Polish Ship
Polish
Deliveries
Customer
Improvisation
to
Repeatable
Standard
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4: Leadership
High Velocity Improvement…
-- Manage systems
-- Cascade capability
3: Knowledge sharing
-- Apply discoveries
systemically.
Stamp
Weld
Ship
Stamp
Weld
2: Problem solving
-- Stop spread
-- Build knowledge
1: System design
-- Best approach
-- See problems
Steel
Coils
Tool
‘n Die
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Stamp
Weld
Ship
© Steven J. Spear 2010
Ship
Alcoa’s Pursuit of
Perfect Workplace Safety
Incidents per 200,000 hours
worked
Workplace Safety at Alcoa
5
4.4
4.2
4
3.9
3.5
3.3 3.2
3
2.9
2.5 2.4
2.3 2.2
2
2
1
1.9
1.5
1.2 1.1
0
1985
1.0 0.8
0.8 0.8
1990
0.5 0.5 0.5 0.4
1995
0.2 0.3 0.3 0.1
2000
2005
Year
Alcoa
US Manufacturing
1: Manage work to see problems 2: Solve problems as seen
3: Share what is learned
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4: Develop people for 1-3
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Health care: Good News Bad News
Chance of
Successful
Outcome
Potential
Actual: Great
Actual: Poor
Surgery
Post-Op
Time
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Pratt&Whitney
Engineering Standard Work
2: Pathway:
WORKFLOW MAPS…
Who does what work for whom in what order?
3: Connections:
DESIGN CRITERIA
Expected handoffs
Request
Response
1: System Output:
DESIGN OBJECTIVES
What does the
customer need?
Request
Response
External
Customer
4: Methods:
ACTIVITY PAGES, PROFICIENCY TESTS,
TECHNOLOGY ASSESSMENT
How to do work?
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US Navy: Nuclear Propulsion
• See Problems
• Solve Problems
• Share Learnings
• Lead
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Selected Publications
• BOOK: Chasing the Rabbit: How Market Leaders Outdistance Their Competition, McGraw Hill, (Fall 2008)
• “Who Was Caring for Mary: Revisited,” with Frederick Southwick, Academic Medicine (December 2009).
• “Fixing Healthcare from the Inside: Teaching Residents to Heal Broken Delivery Processes As They Heal Sick Patients,” Academic
Medicine. 81(10) Suppl:S144-S149, (2006).
• “Better Care for More People at Less Cost,” with Don Berwick Boston Globe op-ed (October 2007)
• “Learning from the Masters: By learning from Toyota and Alcoa how to manage complex work processes, hospitals can improve
performance,” Cerner Quarterly, (2006).
• “Fixing Healthcare from the Inside: Teaching Residents to Heal Broken Delivery Processes As They Heal Sick Patients,” Academic
Medicine. (2006).
• “Using Real-Time Problem Solving to Eliminate Central Line Infections,” with Richard Shannon and other co-authors. Joint Commission
Journal on Quality and Patient Safety, (2006)
• “Operational Failures and Interruptions in Hospital Nursing Work,” with Anita Tucker,
Health Services Research, (2006).
• “The Health Factory,” New York Times [op ed], (2005).
• (#) (*) “Fixing Healthcare from the Inside, Today,” Harvard Business Review (2005).
• “Ambiguity and Workarounds as Contributors to Medical Error,” with Mark Schmidhofer,
Annals of Internal Medicine (2005).
• “Medical Education as a Process Management Problem,” with Elizabeth Armstrong and Marie Mackey, Academic Medicine (2004).
• (*) “Learning to Lead at Toyota,” Harvard Business Review, (2004)
• “Driving Improvement in Patient Care,” with Debra Thompson and Gail Wolf,
Journal of Nursing Administration (2003).
• (*) “The Essence of Just in Time,” Productivity, Planning, and Control, (2002).
• (x) “When Problem Solving Prevents Organizational Learning,” with Anita Tucker and Amy Edmondson, Journal of Organizational
Change Management, (2002).
• (*) “Decoding the DNA of the Toyota Production System,” with H. Kent Bowen,
Harvard Business Review, (1999).
(#): McKinsey Award, One of top two articles in Harvard Business Review, 2005.
(*): Shingo Prize winning articles.
(x): Best paper proceedings, Academy of Management conference, 2001.
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Speaker Profile
Steve Spear, senior lecturer at MIT and senior fellow at the Institute for Healthcare Improvement, is internationally recognized as
an expert in innovation, operational excellence, and organizational learning, with deep experience in industry and health care.
His reputation stems from award winning articles such as Harvard Business Review’s "Decoding the DNA of the Toyota
Production System" and "Fixing Healthcare from the Inside, Today," and his critically acclaimed and prize winning book Chasing
the Rabbit: How Market Leaders Outdistance the Competition.
Spear focuses on creating organizational capacity for high speed, broad based, improvement and innovation. He has both
studied already outstanding organizations and has also helped ordinary organizations become outstanding. Along those lines he
helped create the Alcoa Business System and the Perfecting Patient Care System used by hospitals in Pittsburgh, and his work
was the foundation for Pratt and Whitney’s Engineering Standard Work for jet engine design. All are credited with marked
increases in quality and capacity and reductions in cost.
His publications have appeared in Harvard Business Review, Annals of Internal Medicine, Academic Medicine, the New York
Times, and the Boston Globe. Awards for his writing include five Shingo Research Prizes, a McKinsey Award from HBR, and a
USA Books National Business Book Award.
Spear received his doctorate from Harvard Business School, masters of science in Mechanical Engineering and in Management
from MIT, and his bachelors degree with a concentration in Economics from Princeton University.
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© Steven J. Spear 2010