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Lean Enterprise Transformation
Lean Global Networkwww.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
john shook
Timeline: Lean
1950 1950 1956 1962 1968 1974 1980 1986 1992 1998 2004 2010 2014Today
A lean future?11/6/2014
Toyota Crises – Financial loss
and recalls2008
3rd Boom - Toyota Way 1/1/2004
Machine That Changed the World
1990
2nd Boom - Lean Production, IMVP,
consultants
9/17/1988
NUMMI12/12/1984
Early Explorers to Toyota City
1980
1st Boom of learning from Toyota
1973
OMCD 1968
Chief Engineer1955
Experiments in TPS and other Toyota Way Pieces1950
Rebuilding Japan (TQC, TWI, PDCA)
1950
Incubation 1950 - 1980
Diffusion and Dilution 1984 - 2014
Future Direction 11/6/2014
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
• Purpose – Provide value to customers (cost-effectively 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.
7
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”.
11
People & Process – aligned by leaders to achieve purpose
Lean Transformation
Aligning:
•Purpose•Process•People
to create value
WHAT is our
PURPOSE?What situational problemdo we need to address?
How to improve the work?
How to develop
the people?
What is our BASIC THINKING??What is our BASIC THINKING??
What leadership
behavior and management system do we need?
Lean Transformation Model
PROCESSPROCESSIMPROVEMENTIMPROVEMENT
Continuous, Continuous, practical practical
changes to changes to improve the way improve the way the work is donethe work is done
CAPABILITY CAPABILITY DEVELOPMENTDEVELOPMENT
Sustainable Sustainable improvement improvement
capabilitycapabilityin all people in all people at all levelsat all levels
VALUE-DRIVEN PURPOSE VALUE-DRIVEN PURPOSE - Situational Approach - - Situational Approach -
““WHAT PROBLEM ARE WE TRYING TO SOLVE?”WHAT PROBLEM ARE WE TRYING TO SOLVE?”
Basic Thinking, Mindset, AssumptionsBasic Thinking, Mindset, AssumptionsThat drive this transformationThat drive this transformation
BehaviorsBehaviors
MANAGEMENTMANAGEMENTSYSTEMSYSTEM
Lean Transformation
Transformation Questions1. 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 Questions1. 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 Questions1. What is our purpose or what problem are we
trying to solve, what value to create?WHAT is our
PURPOSE?
What situational problemdo 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 ProcessBreaking Down Company Problems and Solving Them
at Each Level
21
Company-Level
Division-Level Hoshin
Group/Individual Problem Solving
Break
down o
f Hos
hin
Individual
Contribution
Sustained high
performanceEmployee
Motivation
Purpose/Problem At Each Level
Each person with responsibility for his or her situational problem to solve!
Transformation Questions1. 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?
WHAT is our
PURPOSE?
What situational problemdo we need to address?
How to improve the work?
Process Improvement…
What is the work to be donein 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 Questions1. 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?
WHAT is our
PURPOSE?
What situational problemdo we need to address?
How to improve the work?
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…”“Make people as you make product…”
Lean Enterprise – the ultimate “social-technical system”
33
• The process of doing the work is integrated with the process of improving the work, and…
Lean Enterprise – the ultimate “social-technical system”
34
• The process of doing the work is integrated with the process of improving the work, and
• The operating processes ARE people development processes
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 Questions1. 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)?
What leadership
behavior and management system do we need?
WHAT is our
PURPOSE?
What situational problemdo we need to address?
How to improve the work?
How to develop
the people?
What leader
behavior and
management system?
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
What leadership
behavior and management system do we need?
WHAT is our
PURPOSE?
What situational problemdo we need to address?
How to improve the work?
How to develop
the people?
What is our BASIC THINKING??What is our BASIC THINKING??
What leader
behavior and
management system?
Transformation Questions1. 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?
It’s easier to act your way to a new
way of thinking than to think your way to a new way
of acting.
It’s easier to act your way to a new
way of thinking than to think your way to a new way
of acting.
How to Transform?
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?
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
Establish alignment around a vision to achieve the
purpose of the organization
Lean Thinking • Principle of Respect for
People
• Practice of Continuous Improvement
53
Unending learning…to make things better…in everything…everywhere