Love & Lean

George Saiz

President & CEO

Association for Manufacturing Excellence

Early Years

• First Job – General Helper @ $2.00/hr.

• Early management thoughts

– “Create an environment where they don’t want to miss

what’s going on”

• Education at night (BSBA, MBA)

• General Helper to General Management

– (9 promotions in 17 years)

$2.25/hr.!

Introduction to Lean

• 1992:

• Lot size of 1…Bottlenecks (Herbie)

• Lego Simulation

Love & Lean - Overview

• Journey towards developing a People-Centric

Culture

• Connecting the heart of engaged employees

with the tools of Lean

• Results you can see

• Summarize what has been learned

Purpose

To be a TEAM

Dedicated

Innovative Solutions

Improve Customer Outcomes

June 2013

1st AME CEO Summit on People-Centric Leadership

A culture where every day everyone goes home

fulfilled by pursuing excellence and where everybody

flourishes.

People-Centric Leadership

3 key takeaways + 1:

1. Very intentional efforts towards employees

2. “Entrusted”

3. PCL looked different at each company

Overriding thought: we have their hands, but we could have had their minds & their hearts if we had just known how to ask

Self Examination

1. Great programs for employees – episodic in

nature

– Quarterly All Employee Meetings

– Picnic, Halloween Party, Christmas Party, Chili Cook-off, Ice Cream Truck, Hot Dogs

– Recognition – Company Bucks, Living Our Mission

– Hands-on Product Training

Self Examination

2. Leadership training consisted of educating

managers to go out and do something to our

employees

– 6 one-day trainings / year on leadership

3. We never asked our employees what they

wanted!

The Trail after their Minds & Hearts

Leadership Training - February 2014

What will people-centric look like here?

• 42 leaders gathered – top management to production leads

• 3 components of the day

– Colonel Arthur Athens: “What’s love got to do with it?”

– Dissect his message and explore the behaviors of people-centric leaders

– Go to the Gemba…ask the employees what should PCL look like here?

Synthesized the day’s data…

• Communication

• Care

• Alignment

• Development

Goal Statement established:

“Engaged when we are here…

fulfilled when we go home:

New Name

“People-Centric Culture”

• Why Culture:

– Leadership is really a relationship

– Goal is to educate both sides of the equation

– Strove to make it daily…not episodic

– Wanted it to be employee driven

Communication Skills Training Seven Interlaced Modules

ALIGNMENT

LINE OF SIGHT MANAGEMENT - PDCA CYCLE

Line of Sight Evolution

Teams and

Framework

Company Culture, Strategic

Framework, Teams and

Functional Performance

Plans Introduced

Tracked, Functional

Area Plans Driven by

Routine Follow Up

Focused on Results

(Company,

Operational,

Individual)

AME

Hitting the Target!!!

Independent Units Focused, Clear Business

Direction

Behaviors Identified

and Organization

Energized

Smart and Sharp,

Lean and Mean

Vision and Mission

Driven

Development, Benchmarking &

Wellness

Pillar

• Development

• Benchmarking the Best

• Wellness

Program

• Mentoring & Coaching

• Autoliv, Danaher, AME

• Lincoln Industries Model

Pillar

• Development

• Benchmarking the Best

• Wellness

Minds & Hearts…to Hands

• Equip all employees with a standardized problem solving tool – A3

• How?

– Trained all employees in the A3 process

– Hands on workshop with real problem tackled

– 3 year incentive plan launched

A3 Incentive Plan & Evolution

• Payout if overall company goal achieved and

individual goal achieved

• Year 1: One A3/employee/quarter

– “On anything”

• Year 2: Two A3’s/employee/quarter

– Department identified focus area of improvement

• Year 3: Three A3’s/employee/quarter

– Introduced Team credit

Added in “2 Second Lean”

• Department read “2 Second Lean” as a team

• All team members – 15 minutes daily at

beginning of shift

• On my walks I reviewed their A3 submissions

• Motivated me to start daily “2 Second Lean”

One of my “2 Second Lean” Improvements

2 Second Lean – 09/15/14

BEFORE AFTER

Business cards in folder Cards stored electronically through App

A3 Results

A3’s become the standard problem solving tool

Everyone is thinking “root cause” and asking…”what problem are we trying to

solve?”

Over 1200 A3’s completed in Year 3!

Shining Example

• Over that time period, insourced flagship product

and reduced COGS by $1.8M annually with

incremental improvements

Minds…Hearts…Hands

Another Example of Results – Autoliv

• 100,000 Kaizens in one year with 1100 employees

– ~91 completed Kaizens per employee!

• In 2012, largest plant had 5X Productivity of 1995 with 3X product complexity

Copyright © 2016 Gallup, Inc. All rights reserved.

HERE’S HOW Engagement Links to

Business Outcomes and why it Matters

27

-37%

-25%

-65%

-28%

-48%

-41% -41%

10%

21% 22%

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

Business units in the top quartile of

engagement have 21% higher productivity than their bottom quartile

counterparts and 48% less safety incidents.

Turnover

Absen-teeism

High-Turnover

Orgs.

Low-Turnover

Orgs. Shrinkage Safety

Incidents

Patient Safety

Incidents Quality

(Defects)

Customer Metrics

Produc-tivity

Profit-ability

Meta Analysis Outcomes: Top vs. bottom quartile work units

Firms of Endearment (FoE)

Investor Returns Over Time

Summary

• People-Centric Leadership – where everybody

flourishes

• Leaders are “entrusted” with these lives

• People-Centric Leadership will look different in

each company

• Minds…Hearts…Hands

Summary (cont’d)

• Current State of Leadership / Training:

– Episodic

– Only educating half of the relationship

– Never asked our employees what they wanted

• Shared the 6 Pillar approach:

– Communication, Care, Alignment, Mentoring & Coaching, Benchmarking the Best and Wellness

Summary (cont’d)

• Equipping, Incentivizing, Turning Loose!

• A3 Progression 1,200 completed in one year!

• Business Results that differentiate you from the

competition!

Wrap Up

• Enterprise Excellence + People-Centric

Leadership / Culture can transform your

company and the lives of your employees

• The transformation of your company

cannot happen without the transformation

of your employees!

One Last Quote

“Employees are not our company’s

greatest asset…they are our company!”

Bob Pritzker The Marmon Group / Colson Associates

Thank You!

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Session No: ThP/42

Love & Lean

George Saiz

AME

gsaiz@ame.org