Quick recap
Last Case Study, number 3, part 1, I referred to conflicts between members of the Top-Team of a business which designed and produced specialist cleaning machines for the automotive industry.
In the following articles, I will write about several Habits of Lean Leaders which had a significant influence on making this business very successful. In this part 2, I will present Habit 8.
Habit 8, The Habit of Knowing the numbers.
Now each Habit has the following components: A skill area, a title, a description, a reflective wisdom statement, a key goal or goals, a set of tools, competences and skills which need to be understood, learned and practiced, several case studies and homework. What comes next in this article is an overview what this habit is and how it was deployed in this particular business case.
Lets just remind ourselves of the Size of the problem I wrote about in Part 1. Major conflicts between the Production director, Chief Accountant and Sales Director were giving the CEO a major headache. Orders were being delivered late to customers. Profit margins per machine were much lower than was sustainable for the business. Cash-flow was tight and banks were not eager to re-lend.
Internal conflict between the Directors of the production, sales and accounting teams was identified as the key problem in the business, which needed to be addressed as soon as possible.
Where you have conflict between Top-Teams, as we had in this business, you have what is called technically 'unsubstantiated opinions, beliefs and behaviours', which in non-technical speak is called 'bull-shit', or BS for short. BS probably consumes around 80% of many meetings in today’s modern companies. In fact at the management level BS is so rife, there are two Habits which deal with this subject.
Habit 8 addresses part of this problem by making sure that what ever is discussed as the problem is validated by numbers.
Hence, Habit 8 is the Habit of knowing your numbers.
In this particular business we created two A3 projects. (in hindsight, quite possibly an Obeya Project Management system might have been more appropriate). One A3 project focused on determining why profit margins and lead times were the major financial and delivery time KPI’s that were not being met. The second A3 addressed the problem why wasn’t the Top-Management Team working as one synergistic team but constantly fighting amongst themselves.
You see, what the process managers and consultants get wrong is they think leadership and business is all about numbers and processes, standards and procedures. Well, actually TPS is about people, values, team building and making the next persons job easier within an environment of trust and respect.
This framework and environment creates the possibility for members (employees, teams, individuals) to find meaning and purpose in their everyday work. Which in turn gives them the motivation to perform.
Perform means get the results. Of course, being coached in the art of lean tools and leadership competences, but always working on a problem. (that’s the short version of what TPS is in the value stream).
The wisdom statement behind Habit 8 is “progress means knowing where you are on the road map”. What does this mean?. In short it means you do a lot of measuring, analysis and visual management. Each Top-Team member had to show on the white boards their figures and numbers. Using A3 we listed over 30 causes of the profitability and lead time problems. When it came to A3 project number 2, which addressed the problem of inappropriate behaviour of the Top Team we had over 60 causes!. Not surprising for anyone who understands the problems at work are not the robots or processes, but the people!.
The key goal of Habit 8 is to measure so as to be able to understand. I think that is self-evident for this short article here. By getting the Top Team to move from BS management to knowing and understanding the numbers and behaviours, we improved communication and started to build a team. The team, gradually created a matrix of behaviours and performance measures which allowed them to have value enriching conversations on what the issues were and solve them.
In PART 3 of this case study, I will go through the Habit 7 – The Habit of focusing on Facts and Foxes.
Build you organisation by allowing your people to focus on structured problem solving.
What Toyota focuses on is “Developing People through Problem Solving”, with a great deal of support mechanisms around the word “support”.
In the case of this business, the support came from the 16 Habits.
I hope this case study has shown how this system works and why it work.
If you would like to know more, please contact me, Mark Forkun on: mark.forkun@llw-institite.com