7/18/2006

Getting to Lean - Whole System Design

Filed under: Lean Culture, Lean Manufacturing, Learning Organization — Larry Miller @ 12:50 pm

Lean organizations are learning organizations, a culture, not a technique. How do you create that culture?

Some good number of years ago I received a call from Honda America Manufacturing. To my surprise, I learned that the first plant manager of the Marysville Plant bought my book American Spirit in the Tokyo Airport waiting to move to the United States and take up his duties. He read it on the plane and concluded that “if this is what Americans believe, we can succeed in the United States.” For a number of years it then served as the text for their course on the Honda Way, taught by the Executive Vice President, Scott Whitlock to all new managers.

I am not sure that my book reflected what Americans believed then, but this coincidence did give me the opportunity to visit Honda on several occasions and learn a good bit about how their system of work, management and organization worked. They were very frank in attributing much of their own system to the Toyota Production System. This system is now commonly referred to as Lean production, lean organization or lean culture.

The most important lesson of visiting Honda is that you cannot find the explanation for their excellence in any one technique. When I first visited there the U.S. was in a frenzy over Quality Circles and its devotees were certain that it was the key to Japanese success. They were wrong. Then statistical control charts were given great credit for Japanese success. Few could be found at Honda. A dozen other simplistic explanations have been given.

The truth is that Honda and Toyota are “whole-systems” and the sub-systems of the work flow, motivation and incentive systems, training systems, organization and management levels, improvement processes, and many other factors are all components of the “whole-system.” It is a culture and all cultures are complex.

At this same time my consultants and I were practicing socio-technical systems design, the method used to create the first self-managing team plants in the United States. We took this methodology and applied it to the design of organizational system that incorporated the lessons of Honda, Toyota, Federal Express, and other great companies.

I recently attempted to describe this process on one page, inspired by the Strategy Maps of Kaplan & Norton. This map includes the principles and of the New Capitalism in my recent book with the process of whole-system design.

I know that without a great deal of explanation it is likely not fully comprehensible. But, if you have a question about it, send an email or make a comment.

Cheers, LMM
Getting lean small2

7/12/2006

Shamu and Me

Filed under: Corporate Culture, Organization Design and Process Improvement — Larry Miller @ 3:09 pm

Shamu, husbands, children, inmates, managers and employees… all respond to reinforcement.

For the past couple of weeks the most emailed article on the New York Times has been Amy Sutherland’s “What Shamu Taught Me About a Happy Marriage” in which she shares her application of animal training, learned from watching Shamu’s trainers, to training of her husband to fetch and heal.

No one has reported how her husband feels about all the attention. We don’t know if he is barking wildly or just whimpering in the corner while he awaits a treat or tummy rub.

My daughter emailed me this article and it made me wonder whether she is aware of the degree to which she is a product of “Shamuism.”

Of course, this is all about elementary learning theory or behavior modification, positive reinforcement, behavior shaping, extinction, etc., all studied and promoted by B. F. Skinner and his followers. I began my career working in prisons and established the first token economy in a prison, a checking account system in which inmates “learned to earn”, paid for everything with prison money (points), including rent in one of four dormitories, a luxury, quality, standard, or efficiency dorm.

My wife and I used behavioral principles in raising our children, usually avoiding punishment and relying on positive reinforcement for desired behavior. It works.

After prison I went to work for Fran Tarkenton’s company, one of the pioneers in applying positive reinforcement, what we called “Behavior Management” to the work place.

As Amy Sutherland has discovered (I guess old lessons have to be relearned in new packaging every few years) the power of positive reinforcement has not been diminished as new theories have been promoted in recent years.

If you examin the world’s best companies, including Toyota and Honda, Dell and Intel, you will find that they have integrated behavior shaping, ing, and other techniques of positive reinforcement into their system. They don’t have “Behavior Management” programs that stand out as temporary and hyped efforts. Rather, they simply do a good job of recognizing and rewarding the behavior that leads to competitive success. That includes quality improvement, innovation, cost control, etc.

If you were going to design the ideal organizational system (my favorite frame of reference), part of that design, integrated with the other pieces of the whole-system, would be well thought out system of positive reinforcement. The ideal system would include a few basics of effective behavior modification:

1. It would not rely on one “schedule of reinforcement” but would include multiple schedules. It would include variable, as well as fixed interval schedules. Variable schedules result in stronger behavior that is more resistent to extinction.

2. It would include both tangible (money, for example) as well as social schedules of reinforcement.

3. It would not assume the ability to defer gratification over long periods and would, therefore provide immediate reinforcement, such as the awarding of points that could later be exchanged for a tangible reward.

4. It would be administrated consistently so all employees felt an opportunity for reinforcement.

5. It would follow the principle of “shaping” that calls for reinforcing successive approximations to a desired performance, and not hold out the reward for performance that many found impossible to reach.
“important” to the success of the organization.

But, perhaps most importantly, any system of positive reinforcement, or Shamuism, should not be a stand alone program that comes and goes. It should be part of the architecture of the whole-system of the organization.

(A commercial note: In my new book there is a chapter titled “When You Make Performance Matter - the Currency of Appreciation” in which I discuss this topic in more depth. )

7/7/2006

Power and Influence 2006

Filed under: Social Capital, Spiritual Capital, The New Capitalism — Larry Miller @ 10:13 am

Both governments and companies suffer under illusions of power… the intoxication of the material world and the dismissal of the power within the heart and mind.

Flash back to Vietnam. In 1966 I was getting bored. I was serving in the 513th US Army Intelligence Corp in Oberussel, Germany. Vietnam was beginning to happen. It was where the action was, the excitement, the focus of the news. So, at the age of twenty, I volunteered to go.

It is perhaps hard for most Americans today to recall the mindset of the times. The threat of global communism, the domino theory, the assumptions of power. We saw Vietnam as an incredibly small, backward country. We had all the aircraft carriers, missiles, a huge army fending off the Soviet Union and China. What did Vietnam have? Jungles. My office was in a building directly under the flight path into Tan Sanut Airfield, then the busiest airfield in the world, as three fighter jets, side-by-side took off and landed every minute. It was an incredible display of power.

Ho Chi Minh said “You will kill ten of my men for every one of yours I kill. But, it is you who will tire of it.” General Patton said “Every war is the same. Tools change, but war is the same. You defeat the soul of the enemy, man.” They both knew something about power.

We lost fifty-eight thousand men and it is probable that the Vietnamese lost ten times as many. Yet, they won and we lost.

We should have learned something about the nature of power. At its peak we had more than five hundred thousand soldiers in Vietnam. We built massive air fields and ports. None of it mattered.

Whether there is a valid parallel to what is happening today in the Middle East we can all speculate and I won’t debate it here. But, what is clear is that to the degree that we do not understand the realities of power, we will lose. We are fighting the wrong war. The great irony of Vietnam is that now we are investing in Vietnam and businesses view it as a new market, source of labor, economic opportunity. The Vietnamese want IPODs, blue jeans, and wireless Internet access. We lost the military war. We are winning the war of attraction. The soft-power war.

A couple of years ago Joseph S. Nye, the Dean of the Kennedy School of Government published Soft Power, a book that should have been read by more leaders in both business, but in particular, in government. Nye defined soft-power as “getting others to want the outcomes that you want” or, “the ability to shape the preferences of others.”

Soft power is the critical element of business success today. Money and muscle do not sell product, attract the best people, or produce breakthrough innovations. Nor do money and muscle win the hearts of Pakistani villagers, Afghan farmers, or Iraqi children. Neither does it win the affection of teenager digital download devotees or website surfers.

Another way of defining soft-power is social and spiritual capital. Just as one has money in the bank that may attract earning, social and spiritual capital attract the heart and mind, the affection, the loyalty, and trust of both the market and employees.

How many classes, meetings, seminars, have you been to on building social or spiritual capital, or soft-power? Most likely none! We are primitive in our understanding and skills at building these forms of capital. A hundred years from now both business and political historians will look back and ask, “what were they thinking?”

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