Journey to a Lean Enterprise:
New Frontiers
Lean Webinar Series
May 5, 2011
Company
LOGO

Welcome!
To new friends and old across the U.S. (28
states)

Special welcome to our friends at the Veterans
Health Administration.
To our global friends in:

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Australia
Canada
Romania
Switzerland
Uruguay
© 2011 Karen Martin & Associates
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Consider this…
Success with Improvement Efforts
None
17%
Lasting
20%
Temporary
63%
The Economist, 2000
© 2011 Karen Martin & Associates
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A decade later…
Financial Impact of
Improvement Efforts
Minimal
to None
55%
Some
45%
View of Existing
Improvement Efforts
Re-eval
needed
67%
OK as is
33%
Accenture, January 2010
© 2011 Karen Martin & Associates
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Industry Week’s
2007 Census of Manufacturing
433 Respondents
80%
70%
60%
50%
40%
30%
20%
10%
0%
Adopted Lean
© 2011 Karen Martin & Associates
Seeing Anticipated Results
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Our initial understanding was
tools-based
The words “leadership”
and “culture” aren’t
listed the book’s index.
© 2011 Karen Martin & Associates
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Toyota’s 4P Business Model
Where most
“Lean”
organizations
are
Problem-Solving
(Continuous Improvement &
Learning)
People & Partners
(Respect, Challenge, & Grow
Them)
Jeff Liker
The Toyota Way,
2004
Process
(Eliminate Waste)
Philosophy
(Long-Term Thinking)
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What is Lean?
“The pursuit of perfection by constantly
eliminating waste through problem-solving.”
— Jeff Liker, The Toyota Way to Continuous Improvement
“Lean isn’t about eliminating waste. It’s about
developing people and building organizationwide problem-solving capabilities to enable us
to eliminate waste.”
— Mike Rother, Toyota Kata workshop
© 2011 Karen Martin & Associates
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Toyota’s 4P Business Model
The New
Frontier
Problem-Solving
(Continuous Improvement &
Learning)
People & Partners
(Respect, Challenge, & Grow
Them)
Jeff Liker
The Toyota Way,
2004
Process
(Eliminate Waste)
Philosophy
(Long-Term Thinking)
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“We build people before automobiles.”
– Toyota Motor Corporation
May 2004
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Effort Expended on Successful
Lean Transformations
Changing
leadership
practices,
behaviors,
& mindset
80%
Tools
20%
Creating a Lean Culture, David Mann, 2010
© 2011 Karen Martin & Associates
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The Role of the Sensei
“The relationship between the sensei
and the student (deshi) in Toyota is a
key success factor, and one that is
very much underappreciated in the
lean movement.”
“We see process improvement and
people development as two sides of
the same coin in organizations.”
— Jeff Liker & James Franz, The Toyota Way to Continuous Improvement
© 2011 Karen Martin & Associates
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If you want one year of prosperity,
grow seeds.
If you want ten years of prosperity,
grow trees.
If you want one hundred years of prosperity,
grow people.
— Chinese proverb
© 2011 Karen Martin & Associates
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What is the Role of the Manager?
To develop his/her people into proficient problem-solvers.
Manager = Coach
© 2011 Karen Martin & Associates
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New Understanding about how
Toyota Operates
Leaders coach
and mentor.
The workers
identify and solve
problems daily.
Management’s job is to develop the workforce
(and help remove roadblocks to their success).
© 2011 Karen Martin & Associates
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Coaching Relationship
Mentoring Relationship
Wisdom
Wisdom
? ? ?
?
?
?
Coach
Coachee
Focus: Asking questions
Mentor
Mentee
Focus: Providing information

Everyone in the organization must practice PDCA
• Grasp a deep
understanding of the
current state.
• Set a target condition.
• Identify obstacles to
achieving target
condition.
• Select
countermeasures.
• Conduct miniexperiments.
• Implement the best
countermeasures.
Plan
Act
Check
(Adjust)
• Adjust process as
needed.
• Set new target condition.
• Continuously improve.
Do
(Study)
• Measure process
performance.
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Managing the Business =
Problem-Solving
© 2011 Karen Martin & Associates
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A New Definition of Lean?
Engagement [en-geyj-muhnt]]
– noun
1. Enthusiastically providing value to
customers.
2. Enthusiastically solving problems.
© 2011 Karen Martin & Associates
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Strategic
Improvement Roles
for Full Engagement
Who?
Level of Authority
Senior Leadership
What has to happen;
policies
Tactical
Middle
Management
Frontline Workers
© 2011 Karen Martin & Associates
How it will happen;
procedures
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What Should We Focus On?
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TRUE
NORTH
You need an
improvement
strategy that’s
aligned with
overarching
business goals
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Tying Improvement to
Overarching Business Goals
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One Option:
Hoshin Kanri (aka Strategy Deployment)
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What are the root causes for
resistance to change?
No clear vision re: what or why.
Employees have limited control
over their work and limited input
regarding improvements.
Leadership is stuck in old school
western management; directive;
low respect for workers.
Both leadership and the
frontlines lack problem-solving
skills.
© 2011 Karen Martin & Associates

Building a Lean Culture
Strategy

Define and communicate clear annual business goals.
People Development

Build problem-solving capabilities across the entire
organization.
 Value stream management, A3 Management, Toyota Kata

Leaders and managers are coaches.
Process Design & Management
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Make problems visible.
Stop work when problems are discovered.
Continuously set new target condition & engage in PDCA.
Manage processes vs. people.
© 2011 Karen Martin & Associates
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Cultural Transformation
Results
Actions
The Results Pyramid
Partners in Leadership
Beliefs
© 2011 Karen Martin & Associates
Experiences

We’ve Reached a Fork in the Problem-Solving Road:
The Choice is Ours
People-based Lean
Tools-based Lean
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It’s time to pass the improvement
baton from the elite few to the
common many
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Vision for the Future
Achieving significant results from
continuous improvement efforts?
Yes
100%
© 2011 Karen Martin & Associates
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For Further Idea Exchange
7770 Regents Road #635
San Diego, CA 92122
858.677.6799
ksm@ksmartin.com
Connect & learn
Free monthly newsletter:
www.ksmartin.com/subscribe
© 2011 Karen Martin & Associates
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Your Questions
Are there criteria to determine organizational
readiness to adopt a Lean transformation?
What staff & financial resources does an
organization typically need to support a Lean
enterprise (e.g. rule of thumb for FTEs to devote to
continuous improvement)?
What is your take on the psychology of
improvement and what are your sources for that,
including experience?
NEXT WEBINAR – The Coach Is In – Tues May 24 11:00-12:00 PDT
© 2011 Karen Martin & Associates
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