Every company must be humanized

3 kwietnia 2019

At the end of the day, Kaizen is mostly about taking action – if we take no action and deliver no results, it means that Kaizen has never happened. Categorization is an academic activity, and Kaizen was never meant to be an academic tool. It was meant to be something natural for human nature – says Collin McLoughlin, president of Enna Consulting, author of „True Kaizen”, interviewed by Przemysław Ozga.

Production Manager: In True Kaizen you mention the so-called Lean context. Why is that context so important for managers?

Collin McLoughlin: Teaching and publications about Lean usually put a strong emphasis on tools, techniques, packages, programs or formats. Meanwhile, it would be better to take a step back and ask the following questions: What was the original context of these tools? Why were they created in the first place? What business and social challenges have led to the development of the Seven Wastes, the 5S and the other tools we are learn about today? I think that managers and other leaders should delve deeper, try to understand the philosophy, methodology and indeed the context of organizational challenges in which companies decide to use Lean tools.

For example, what is the meaning of the Seven Wastes in the context of customer service? For example, does it make sense to search for „transporting” or „overproduction” when the customer service department faces an excessively large number of customer queries? Yes, it does, if we look at the processes from the perspective of a person from that department and ask ourselves: how long does it take me to search for information? We may then notice that our customer service faces „motion”, one that is electronic rather than physical, associated with working in front of a computer. As a result, we can analyze the management of customer queries in our service department and eventually answer the following question: how to reduce the amount of work required to find information in the company’s computer system?

Obviously, if we were to treat the Seven Wastes literally, the category of „transporting” would not make sense to an employee who sits in front of a computer and takes phone calls. However, if we contextualize this situation, we will notice that the key waste here is „motion” required to operate computer programs. We can then take a closer look at these programs, visualize the employee’s workload and develop a method to reduce this motion, e.g. by splitting the work between several people. We should do all this so that in the end, from the customer’s point of view, the way from query to solution is as short as possible.

As workshop instructors and managers we must always ask ourselves: What is the problem? And then – how to explain the problem to the person who does the job and has a certain role in the organization? That should do the trick.

PM: You mentioned the Seven Wastes, a concept well-known to anyone who has ever dealt with Lean or Kaizen. In the contextualization you’ve just mentioned, can we replace one of the “standard” wastes with another one that better captures the specific situation in our company?

CM: Absolutely, it is not only possible, but also desirable. The essence of the meaning of Kaizen is to make today better than yesterday. So if you can simplify something, explain your employees in a more precise and meaningful way which activities are not valuable from the perspective of your customers – then by all means go ahead with such modifications. Among other things, my sensei Yamada taught how to simplify wastes so that the work could be done earlier and faster. One useful simplification is the concept of „stagnation”, or activities that are not part of the production process. Employees understand the term easily – they see that some bits of their work, some requests made to colleagues or questions asked to customers are stagnation, as they don’t lead anywhere. Using this concept, we can easily contextualize the Seven Wastes in a simpler way, analyzing work in only three phases: motion, transport and stagnation. They are of key importance for the work to move forward, and that’s exactly what we want. Why waste time categorizing worthless activities as part of the Seven or perhaps even Nine or Ten Wastes? Why not keep it simple? At the end of the day, Kaizen is mainly about action – if we take no action and deliver no results, it means that Kaizen has never happened. Categorization is an academic activity, and Kaizen was never meant to be an academic tool. It was meant to be something natural for human nature.

PM: In your book you say that the Western culture has an issue with visual communication.  Is it a matter of over-simplification? Or perhaps – on the contrary – a matter of excessive complexity of the Western world?

CM: I can only rely on my education here: I was educated in Canada, the United States and England, in such fields as business education, accounting, finance, statistics and engineering. So it’s hard for me to say what things I haven’t been given in this education – but let’s try to determine what visual management means in practice.

The two words we started with are simplicity and complexity. I would look at it from a different perspective – from the concept of advancement, which I would define as the minimum amount of resources needed to achieve the desired effect. In the case of visual communication it would involve answering the following question: Do all these boards, sound or light signals efficiently communicate the action that needs to be taken? Do they effectively inform factory or office staff that something needs to be corrected in their work? And that’s the context that is missing in the Western education system: people are not taught to assess on their own whether work goes well and when something needs to be improved.

So when we talk about visual communication, the basic questions are: Is it simple enough? Does it appeal to all the senses, creating an optimal environment for people to take action? Doesn’t it involve too many procedures – lists and forms that hinder action instead of making it easier? The role of visual communication is therefore to create a favorable working environment. What should it contain? Imagine, for example, a beautiful garden: when you enter it, you become surrounded with various visual impressions, smells, sounds, wind, and texture of earth beneath your feet – you immediately feel that you are in a specific environment, that what is outside is different. This is what visual management is all about – creating an experience in the work environment that appeals to different senses and makes people feel safer and helps them take the right action with the best possible outcome.

Unfortunately, this is something I did not see in my formal education. If this context – the context of visual management – were brought to schools and other educational institutions, I think it would empower those institutions greatly. In our company, we are certainly trying to fill this gap: by using visual management, we help build a work environment that really appeals to the senses.

PM: In your book you differentiate between efficiency and effectiveness.  Could you explain the difference? What is the meaning of those terms for managers?

CM: Generally, efficiency measures the performance of machines, not people. The measure of human work is productivity – the number of units produced per hour by one person. People are designed to be productive, while machines are designed to be efficient. The important difference is that over time a person can increase his or her productivity, whereas a machine cannot become more efficient: its design has certain limitations and at some point the next generation of that machine is simply introduced. The role of the machine is also to meet certain technical standards – that’s why we invest in it.

So machines are supposed to be efficient, while people are expected to be effective. They should observe the situation and its changes and then make the best possible decisions. So effectiveness is about doing the right things first. Then you can think about how to become more productive in taking individual actions.

This is especially important for managers. Management – even at the team leader’s level – is not about walking around the plant and repeating „productivity, productivity, productivity”. First and foremost, the following question must be asked: Do my employees and their team leaders get the right information to help them make effective decisions and prioritize tasks? Are they being supported by a well-organized working environment? Only then you can start worrying about their productivity and, in the case of machines, efficiency.

Unfortunately, in most companies these conditions are not met, because the main emphasis is on productivity. Then it turns out that these companies waste a lot of resources, time and energy to do something that should never be done, given the dynamically changing customers’ needs.

PM: You have often emphasized the importance of effective observation. How does it work with managers? How are they supposed to find the time for observing their workplace?

CM: In the case of a manager, the inability to find the time to observe the workplace is a contradiction in itself. First of all, enough time should be earmarked for this, as well as for monitoring the customers’ requirements. Ultimately, as managers, we have to make decisions affecting both the whole company and the responsibilities of individual employees. Therefore, if a manager says that he or she has no time to observe, collect facts, understand the direction in which the company is heading, it means that he or she does not understand his or her priorities. Perhaps he or she feels too much of an ordinary employee, focusing on productivity and task performance, while his or her true responsibility is for what other people should do and when. This may be due to the wrong messages given to these managers by senior executives.

PM: Product life cycles are getting shorter and shorter, and on the other hand, we are witnessing a process of mass customization, while customer relationship has never been more important. I think this is the right time to introduce monozukuri to our organizations. Could you explain the historical context of monozukuri and how it was implemented in Toyota Motor Company?

CM: The idea of monozukuri was conceived before the industrialization era. The term meant having the education and skills necessary to bring an idea to fruition – from the idea to the moment when others can admire the results of our work. In English we would call it craftsmanship. Nowadays, this concept could be combined with ideas on how to create an organization with as few managers as possible. Management is about control – it’s usually about accumulating resources and making decisions. Meanwhile, the idea of monozukuri is to self-manage one’s own resources and to place them in a context that is valuable for the customer, without asking someone for permission. With the advent of industrialization, labor became divided between machines and people, which in turn required control. That is why the concept of management is quite new, dating back only to the era of industrialization.

You’ve mentioned customization – of course we have to keep up with trends. However, it is about using technologies and information systems to strengthen the role of human employees so that they have greater opportunities for self-management, self-control, opportunities for voluntary effort in their work and for contact with the end customer. The less we manage, the faster we get the solutions and start generating the profits, even with an increasing volume and its growing diversity.

PM: Let’s now talk about trust, which is in such short supply in my country. What should we do to have more trust and what does trust mean to you?

CM: I don’t know the Polish culture well enough to speak specifically about it, but I know many cultures, from the Middle East, to different parts of Europe, to Canada, Japan over to the western Oceania, Australia, etc. The concept of trust seems to be common to all mankind. If we do not trust a person or a process, then we do not dedicate all our efforts, because we want to protect ourselves and our personal interest. This is quite natural.

This also translates well into the context of an organization. If we want to implement an improvement, we must first understand what it means for those who will have to do the work and live with the changes. Meanwhile, the typical scenario is that a manager comes around and says: „We need a 30% increase in profitability”. What does that mean to production line employees? It is unrelated to their work; they are in the business of assembly, and not in the business of finance. In order to build trust, we should ask ourselves: What does a 30% increase in profitability mean for this department, for this person, for this team leader, for this team? In this context, it may mean the need to produce thirteen units instead of ten.

So we have to go to these people and tell them: „Listen up guys, we have been asked to become more competitive – we need it to keep our customers happy. This requires a 30% increase in profitability. What we can do here, in this department, is to produce 30% more units.” And then we can contextualize it in the following way: „We need to find a way, say, in the next two weeks, to move up from ten units per hour to thirteen units per hour.”

And that’s the point: to contextualize the message, to explain what it is about and to be honest with people: „We have to make some effort, but it will keep our community together, allow us to earn money for our families, contribute to the good of our community, and to achieve a common goal by working together.” If we put it this way, people will say: I see – you do it for me! In this way, I will help myself, my family, my relatives and friends so that we can enjoy life and be productive members of society. This is how you build trust: with a dialogue like this, which shows how the business helps the community and breaks down barriers rather than constantly focuses on the business itself.

PM: Is it about reaching beyond the context of the work and the business, and focusing on the community?

CM: Yes. Every company must be humanized – it can’t be all about results and money. One of the meanings of Kaizen is ‘reward for good work’. For your efforts at work something must be given to you by your customer in return. In today’s society we use dollars, pesos, etc. In the end, however, it’s always about someone spending their money, giving their valuable property to you because they have seen the value in the product or service you offered.

We need to come back to a world where people’s effort that comes with their work is their contribution to society. The more effort they put in, the greater the gratitude of customers – this is something that gives the strength and energy to make tomorrow a better today. I think this is rooted in human nature – this need to be appreciated for your work. Unfortunately, nowadays these things are often separated. The role of Kaizen is to restore the joy of work. You can have a challenging working environment, but still feel the joy. You can see glimpses of this in sport. Take the Olympics – it involves huge challenges, but also gives incredible satisfaction and joy. In our workplaces we should follow the example of athletes. That is also what my cooperation with businesses is about: increasing employees’ self-esteem and enjoyment.

PM: Jack Ma, the CEO of Alibaba, said in of his lectures that in the future we will be unable to compete against artificial intelligence on the question of knowledge. The most important feature that can distinguish us from machines will be creativity, human imagination. How to make good use of the creativity of our employees and associates?

CM: Statistics say that by 2025, at least in Western Europe and North America, more than 50% of everything we learn during our lifetime will come from outside formal education – this extra knowledge will be gained through technology, audiovisual materials, and various training courses. And yes, obviously, we should help every employee make good use of the skills acquired throughout his or her professional life. However, we should do that not to take advantage of them, but to help them experience more fully the value of what they do.

PM: And how do you do that?

CM: Using technology, for instance. Let’s discuss the example of placing an order: in some industries we can already see how technology supports human creativity. Canon Corporation, manufacturer of photocopiers and cameras that once used production lines, now uses specially tailored workstations where one person picks up the order and handles it until the moment of purchase. In Japan, we also see this in the fresh food industry, where individual employees carry out specific parts of the order from the start to the delivery to the customer.

I think that these are good methods for activating creativity. Technological solutions allow us to provide the right information, materials and parts to the right person – and then he or she can accomplish the task on his or her own, instead of practicing „efficiency”, running around picking parts.

It is necessary to move away from the traditional division of labor, which has been imprinted on us by formal education. We must forget the schematic thinking that someone must be responsible for accounting, someone else for inventory control, someone must lift parts, assemble units, pack them, put them in boxes…. That everything has to be divided. Instead, let’s use technology to deliver all these items to one person – at the right time, in the right quantity and order.

PM: In your book you emphasize the important role of the production team leader. Please explain why team leaders are so important for the organization and for its transformation towards Kaizen culture? Also, please briefly explain the Hoshin Model and how it is understood in Japanese companies.

CM: When I visited Japan in 1997, I was still doing my undergraduate studies in finance: I was reading management handbooks, learning about all these financial indicators, business cycles and so on. And then, visiting Japanese factories, I noticed that team leaders – employees just one level above production workers, supervising three to twelve people – speak openly about self-esteem, about motivation, about everyone’s right to be heard; they told me how many ideas proposed by their employees had been implemented… They talked about factors completely unrelated to finance, to the things I was learning from all these books on economics. What’s more, these were the things that in a Western European context are usually discussed by top-level managers! Meanwhile, Japanese team leaders talked about them to production workers. Observing the work at these plants, I realized that the financial performance of the company greatly depends on the level of staff motivation, including the production staff and on how strongly they feel a connection with the company’s core vision, how this vision translates into metrics available already at the team leader level. And it is the team leaders that play a key role in communicating the company’s strategy and vision to the employees, in contextualizing it for their needs. Front-line production workers, those managed by team leaders, cannot be ignored in this type of communication – after all, depending on the industry, they account for 55% to 85% of the entire factory staff! If you want to succeed, a lot depends on these employees. That is why it is so important for team leaders to become true leaders.

This is all the more important because staff turnover in many industries is currently high. There is a high risk of losing employees to other, more strongly developing organizations and industries. So it is worth investing time and energy in team leaders, because it is they who provide the organization with stability and bring practical reality to our business theories. There is often talk of building a grassroots culture to retain production workers, but from the Lean perspective, it makes no sense to invest only in production personnel, which is unstable due to turnover, migration or economic factors. It is much more sensible to focus on developing your team leaders.

PM: And what will management be like in the future? What skills and values of a manager will be irreplaceable?

CM: This question should be contextualized for the Polish reality. Is the education level in Poland high?

PM: Yes, but I was actually asking about the soft skills. In the 1990s, we had many companies that grew quickly, and then many of them either collapsed or stagnated. The owners didn’t understand that they had to change their mindset and start using soft skills in company management. It is a serious problem in Poland.

CM: And are the rules of team sports, such as soccer, commonly known in Poland?

PM: Yes, of course.

CM: So if I worked with Polish managers, I would ask them if they have ever practiced any team sport. Motivation from the coach is so important, the coach is a kind of mentor, has to work on the team’s attitude and not only on improving their skills.

Management is no different: in a company where among production engineers, mechanical engineers or accountants there are managers with ten or fifteen years of experience, does it ever make sense to preach, trying to solve the employees’ problems? Maybe it would be better if the younger staff took advantage of the coaching and mentoring of their senior colleagues, to better use their skills and learn, instead of just listening to instructions and being constantly controlled?

On the issue of control, I will give you an example. For instance, do you know the Kaizen Employee Suggestion System? The name has probably not been translated very correctly for modern handbooks. According to this translated version, employees had to pass on ideas to their managers, who had to evaluate them and check whether they could be implemented. Therefore, the manager controlled the implementation of the idea from start to finish.

Meanwhile, the original concept behind this tool was different – and it’s the foundation on which we should be building our work environments. Its original name was System of Implemented Kaizen Ideas. Employees would describe the ideas that they had already implemented, put sheets of paper in a box, and the manager would read about the changes that had been made, reward them and share their employees’ ideas with managers from other departments, so that they could pass them on to their employees. There was no longer an element of control here, as in the other approach.

If Poles do not have a natural focus on soft skills, Kaizen tools can help – each such tool is associated with some soft skills. Even the Kaizen Suggestion System teaches how to implement ideas, although not really how to ensure their implementation.

We should stop talking so much about management, because management is a sense of control. Meanwhile, if we have well-educated staff with access to the Internet and contact with different cultures, we do not need to control them in such a way – it is enough to let them do their job right. We cannot try to influence everything. Just like in a soccer game: can we influence the proper lighting of the pitch, the quality of the turf, the fairness of the referees, or whether the coach finds enough time to practice with the team before the game? We have to stop for a while and think whether we know how to invest and motivate, or perhaps we only control and set up limits.

PM: In your book you refer to managing “two levels down”. Could you please explain the concept?

CM: The point is that senior managers should not act exclusively on the basis of information from their direct reports. They should find some time to go where their reports’ people work and then make their own observations and interpretations. In this way, when they listen to interpretations of the managers directly reporting to them, they no longer have to control them. Instead, they understand them better and can offer their support whenever necessary. This method is also helpful in keeping track of what’s going on in the working environment.

Yet another idea from my book is that every employee should be part of a team, meaning the whole organization. For instance, it makes sense to set up multi-function teams that cooperate with one another and try to build a company-wide atmosphere that promotes healthy, fearless communication. Currently, companies are dominated by a top-down organizational culture which derives from a certain social reality. We need to break through it. The current culture is laden with fear, although accompanied by a great deal of respect. However, if you want decisions to be made faster, you need to eliminate that fear. I’d like to share with you a useful technique I use with the companies I work with: to eliminate the fear, I ask the managers to go to the shop floor with me to see the challenges faced there. And then I tell them what the target for today is. Subsequently we tell the people: today we have to produce 30% more units. That’s the decision, the priority. I also tell the managers: if we fail, I take full responsibility. It’s not your decision, it’s mine. This takes the burden of fear off people’s shoulders – a fear of trying something out, doing something new. Obviously, I tell them that they have to act reasonably, but whatever they do, is my managerial responsibility. This breaks the ice and inspires people to think truly creatively, act in a true team spirit and – to continue the sports comparison – win the game.

PM: One more question, which also summarizes the content of your book: what is the true meaning of Kaizen?

CM: I could talk about that for hours, but I guess that everyone has been given a kind of natural creativity – it’s encoded in our sense organs, in our hands and minds. However, in our professional life it often remains hidden. But if you want to understand Kaizen, you need to experience it, try it out, test the creative thinking in action. Kaizen is about collecting all your talents and skillfully using your creative energy, to make tomorrow a better day.

From the perspective of leaders and managers: if you can build an appropriate working environment, give people the resources they need and then collect their ideas and enable their implementation in a creative reality, then we’ve made a step towards understanding the true meaning of Kaizen.

Thank you.