This is the first in a series of interviews with industry guru’s who I think are doing some particularly interesting work. Owen has kindly agreed to monitor the comments and respond to any follow-up questions. Enjoy…

About Owen :: Owen Berkeley-Hill is an independent consultant specialising in lean operations and lean transformations. Owen has over 35 years experience in the Manufacturing & Supply Chain, Operations and Information Technology areas. Through his career Owen has held a variety of positions including process re-engineering consultant, strategic planner (IT), synchronous material flow consultant, application development manager and 6-Sigma deployment coach. Owen is a 6-Sigma Black Belt and has an MSc in Lean Operations. Owen was born in Ranchi, India, was educated in Bombay and the UK, and has spent his professional career working in Europe and North America. Owen is based in the UK.

For a definition of the lean terms used in the interview please refer to my ‘Lean IT Glossary‘.

Q. What does the term ‘Lean’ mean to you?

* I believe Lean is an emerging management philosophy, not limited to the shop floor, and NOT described by the limiting and confusing term “Lean Manufacturing”. Many of the elements are well known and have been around for a long time. Many of the elements are seen as “common sense” once the penny drops, but common sense is rarely common. Many of the elements have challenged accepted ways of thinking, such as, economies of scale. It is the synthesis of all these elements, which has caused something quite new and radical to emerge. Toyota has contributed the foundations of this philosophy, but pointing prayer mats exclusively at the Toyota Production System is wrong and limiting. Toyota, themselves have borrowed, copied and built on ideas from others.

* Lean is based on the foundation of “Respect for People”. The fact that an organisation has had to stress this explicitly shows just how chequered the history of management is. Although much pious flatulence has been exhausted about “people being our most valuable asset”, the way they have been treated shows how much we still have to learn about managing people. Extending this point further, I believe Lean is closely linked to Learning Organisations and Knowledge Management. I believe Toyota is probably one of the best examples of how an organisation can evolve through learning. And this brings me to the focus of a continuous-improvement or kaizen program: usually limited to continuously improving products and processes. If an organisation is not “kaizening” its people, encouraging them to learn and grow, I do not believe any attempt to go Lean can be sustained.

* Whoa there! So what about the 5 Principles and the 7 or 8 or 9 Wastes? And where does the customer fit in? I believe these are excellent structures to help our thinking. Without the Lean concepts of Value and Waste, improvements can become unfocused and can go wandering off into the long grass. But without people, the whole workforce, bitten by the kaizen bug, Lean becomes just another piece of consultancy Bling.

* Lean is process focused, obsessed with the creation of Value and the elimination of Waste. For this reason, just like the symbiosis between Lean and Learning, Lean has a strong relationship (largely unrecognised) with Organisational Development. Lean has worked wonders at the micro level improving the shop floor through techniques like 5S. Unfortunately, there are very few, if any, examples of “Organisational 5S” even though we do recognise the cross-functional nature of business processes and the information that must flow flawlessly to make them work. This may be partly due to the stage to which Lean Thinking has evolved. I believe it is mainly due to the attraction of Command & Control bureaucracies where accountability takes precedence over process efficiency.

Q. What are the challenges you experience with implementing lean concepts in organisations?

* There are many, such as historical perceptions and practice which have gone unchallenged for decades (e.g. Ford’s barking idea that they can continue to post profits at Gate Release and not worry about the dysfunctional behaviour this generates), but the biggest challenge is overcoming the Waste of management behaviour (identified by Prof Bob Emiliani). Re-engaging the leadership with the Gemba is a critical challenge. When, on the rare occasion, the leadership visits the Gemba, is the dialogue reminiscent of that between the ball boys and the Duke of Kent? Or can the leadership see the waste and the frustration it is causing? Can they empathise with this frustration and use it to encourage learning and improvement? How many leaders are prepared to go through the same kaizen training, on the same courses, as the people they manage? The excuses for not doing so are many and usually false. I suspect the heavy dependence on analysis (and Excel), as a way of understanding what is going on, has led to the amputation of this key relationship: managers fear their own ignorance of what goes on in the Gemba.

Note from Rich :: I’ll write a post on the model of posting profits at ‘Gate Release’, the challenges it causes and similar issues for IT and other business processes soon.

Q. What are your thoughts on process re-engineering activities within software development projects?

* Are they really “reengineering” or do the have the blinkers applied by the success parameters: cost reductions; headcount savings? I’m not sure that reengineering can be done without the fundamental concepts of Waste and Value. This may be one reason why Michael Hammer’s BPR failed. Reengineering without Lean is not self-sustaining and can be misguided in terms of benefits. I believe Hammer warned that over 80% of reengineering projects failed, and that was before the subject got the reputation of being nothing more than an excuse for “restructuring”.

* How many IT professionals are trained in Lean Thinking? How many reengineering projects begin with a map of the business process which helps identify the waste? How do we analyse our system requirements? Do we include what the user wants or do we understand what she/he needs? Why is Jidoka not taught to all IT professionals? How many IT professionals can spell kaizen let alone understand it?

* From my experience, great applications are only possible when IT professionals are familiar with, and in tune with the processes and people affected by a project. There were some examples of both good and bad “reengineering projects” at Ford: OSCAR and SNOOPIE in terms of how to develop and continuously adapt and improve a valued resource; eVEREST as an example of a complete lack of understanding of Purchasing as a process.

Note from Rich :: OSCAR and SNOOPIE are legacy purchasing systems for non-production parts. eVEREST was a business and IT project to replace around 30 purchasing applications with a single system, including OSCAR and SNOOPIE, and re-engineer the business processes. Reputed to be one of the largest IT projects in the world at the time, eVEREST was ultimately canceled. Owen was the supervisor (read ‘development manager’) for OSCAR and SNOOPIE for a time.

Q. I once saw a metric in one of your presentations that compared the number of employee suggestions per year at Toyota and FoMoCo (1 suggestion for improvement a year per 200 employees at Ford. 24 suggestions per employee per year at Toyota ). What do you think is the reason for the difference?

* Simply a matter of management culture: Command & Control versus Learning. You may remember Konosuke Matsushita’s rant at the visiting business leaders in 1979. It inspired many in the FPS team, and I believe is at the heart of your question. Do management believe their people in the Gemba are intelligent or just “monkeys with screwdrivers”? This is as old as the hills: Douglas McGregor put forward his Theory X and Theory Y of management way back in 1960. we were even taught it at Ford, but there was always the cynical underline, “yes, but in the real world…” which suggested this was theoretical gibberish. Toyota and many of the Japanese companies (through the teachings of Dr Deming) realised that not getting the workforce to contribute their knowledge, experience and imagination was a crippling waste.

* While Toyota was encouraging its workforce to contribute their ideas for improvement, Ford was going the right way in discouraging the same. Did you find anyone at Ford who was a great fan of the Employee Suggestion Scheme? Even those like me who managed to win a maximum award? The system was designed to fail:

• It only allowed you to submit ideas which were not related to your job.
• People affected by your idea were naturally annoyed that someone who was not a professional in that area of expertise had had the temerity to suggest an improvement they had not thought of.
• “Prior management consideration” was a fairly normal response.

* I am not sure what the real numbers at Toyota are, but my contact there told me he expects every employee to submit at least two ideas every month. By every employee, I do not believe he excludes management. The 1 idea annually for every 200 employees at Ford was one quoted to me by a colleague in Education & Training. Everyone knew the suggestion scheme at Ford was counter productive but no one was prepared to do anything, why? I suspect because this was not seen a critical to the survival and prosperity of the organisation.

* The essential difference in cultures is that Command & Control sees employee suggestions as fashion accessory: nice to have but ignored when budgets have to be tightened, and anyway they rarely flow to the “bottom line”. The Learning culture sees this as critical to the success of the organisation. How else would you sustain any improvement, big or small, if it was not sustained and improved by an engaged workforce?

Q. What do you think the IT community can learn from lean concepts and Toyota?

* I think I have covered much of this question in previous answers. Certainly, understanding the concepts of Value and Waste would be essential. Being more process focused would certainly help. Getting to the bottom of Jidoka and its application to IT would be a breakthrough: can you imagine what IT people would do with the fundamentals of Poka Yoke? Understanding information requirements in terms of making a business process flow flawlessly would be a great help. Today, “systems requirements” are heavily over egged by user “wants”, not “needs”.

* John Seddon suggests that much of IT is just an extension of Command & Control management and I have some empathy with that view when you look at all the redundant reports IT produces just because management will not practice Genchi Genbutsu. IT is a great way of eliminating unnecessary variation in a business process, and in that sense it took from the vast number of forms we had to do the same function. If IT is eliminating variation which hinders process efficiency, then that is great, but if IT is forcing compliance for the sake of compliance, then that is a different matter.

* Finally, IT must learn to appreciate kaizen. I always felt that those little tweaks which helped IT users were always seen as doing a friend a favour and potentially going against policy and procedure. I got the impression that unless IT people were engaged in something heroic which involved 400 databases and a zillion lines of code, then it was just quiche, which real programmers avoid at all costs.

Q. What are your opinions of Six-Sigma and its fit with lean and IT?

Note from Rich :: Owen is a Six-Sigma Black Belt and was responsible for coaching, training and certifying a young graduate called Richard Durnall.

* This is a tough one for me. I think Lean and Six Sigma are compatible on one level and are mutually supportive. I would also recommend applying Lean first because it is much more “democratic”: you’ll get very little if any opposition to the definitions of Value and Waste because we are all customers and quickly understand these concepts. By doing so, you engage the workforce and develop a common language around Lean Thinking. Value Stream Maps help see the whole process systemically and help generate kaizen ideas from the people involved (providing they are the ones doing the value-stream map and not some external consultant). Six Sigma and DMAIC help with encouraging people “to speak with data”. Rather than saying we have a big problem, 25% defective grabs attention immediately. If that number is backed up by some measure of the “cost of poor quality”, you now have management throwing a major grump because you had not told them of the problem sooner. You had, but no one was listening to adjectives like “big”, “dire” and “major”. If kept simple, Six Sigma is a very close relative to kaizen, both developed from Dr Deming’s PDCA cycle.

* The problem I have with Six Sigma is its deification of statistics. Unless you are comfortable with the subject, the amount of stats you have to learn is formidable, even to people with an engineering degree. Six Sigma does not eat its own dog food, and apply some Pareto analysis to the number of tool it teaches as part of the Black Belt course. It would be easy to make the teaching more digestible by separating the frequently used tools from the strangers. The result of not doing this is that Black Belts often descend into analysis paralysis. The jury is still out on whether Six Sigma leads to sustainable change, bearing in mind it is an American response to a Japanese threat. American (Western) management has a notoriously short attention span with little if any sound management philosophy or strategic vision. I’m generalising, but there is an element of truth.

* Some of the Six Sigma tools could help understand and solve some of the more complex IT problems (e.g. Design of Experiments). But some of the older Quality professionals might grumble that DoE was there much before Six Sigma. Six Sigma emphasises the Control stage, something which was not practised well at Ford. However, when you look at Control, much of it is dependent on Lean Thinking and tools. And there is no proof either way that Toyota does not have people with a good grounding in statistical analysis.

Q. Where do you see the greatest resistance to change and why do you think that is?

* Management! How often have we heard of any initiative requiring the buy-in of management in order to survive? In the case of Lean, without management leading the change, it will not survive. The mechanical focus on Toyota ’s Lean tools deflects from the need to understand that Lean is a management philosophy. You can get some superficial benefit from just deploying the tools, but this will not be sustained as long as management carry on managing in their traditional Command & Control ways. To understand this in greater detail, I’d recommend Peter Scholtes’ Leader’s Handbook (McGraw Hill). He does not mention the word Lean once, but it is the best book on the new ways of managing people. So why has Lean been so difficult to emulate, let alone sustain? I suspect it is a combination of widespread ignorance and fear of letting go. How many managers go through a thorough grounding in Lean Thinking? In most Command & Control cultures, there is a strong negative correlation between your grade and the number of hours spent in training: the higher your rank, the less your need for any training. This partly the result of fear of not knowing the answers. When there is a need to educate management in something new, how often is the subject boiled down to its “essentials”? For example, a 5-day Green Belt course scrunched down half a day! Does real learning take place? I very much doubt it, and unless management has those “Aha!” moments they will resist any change in thinking they do not understand, particularly if it is suggested by those seen as being among the ranks of the barely warm and twitching. And then there is the issue of letting go: subsidiary; empowerment; handing back the process controls to those in the process. How difficulty is that for someone who sees his value as not adding value but making all the decisions?

* But today, we have management who have been trained and educated to degree and often post-graduate or doctorial level. Why can’t they understand Lean? I suspect this is a direct consequence of the MBA community who have dismissed Lean as something to do with manufacturing and irrelevant to the well-being of an organisation. I also suspect that many of the problems facing organisations today are the results of actions by management, and facing up to this truth can be tough, if not soul destroying. I would like Lean taught not as a specialist subject in Wales, but as the foundation of any management discipline.

* From my experience, the people in the Gemba are rarely, if ever, the problem. If they were, Ford’s Halewood plant near Liverpool would never have gone from being one of the worst in the World, to one of Ford’s Leanest: same people; largely the same management; just a different management philosophy, based on Lean.

Q. What factors do you think affect whether a lean transformation is lasting?

* The more I teach kaizen, the more I’m convinced that it is probably a mild form of OCD (Obsessive Compulsive Disorder) at Toyota. How else could you have so many people involved in so much change at the same time? A kaizen culture can only flourish if management are involved, leading the change, and can speak the same language of Lean. Left to a team, even one as motivated as the FPS team was, I’m not sure it can be sustained. I believe every manager must do a rigorous “apprenticeship” understanding Lean and kaizen.

* But surely they learn this stuff at Management School? How many MBA qualifications exist today, and what is their rate of proliferation (contamination?)? How many are based on the management principles of Lean? Or is Lean taught as an optional minor subject under Operations? Does this excuse most MBAs because they will not spend a lifetime in a dwindling sector called Manufacturing? I am convinced that there will have to be a revolution in how MBAs are taught. The Lean movement does not seem to want to take this on, perhaps because there are too many in the MBA camp; they command big fees. Does an MBA show more loyalty or dedication to her/his organisation or is the qualification seen as a step to a more lucrative and easier life eventually in consultancy? I suspect this is the root cause of management attitudes and needs to be better understood.

* I’d look at the consultancy budget in an organisation. Is it big in comparison with education and training budget or a very small proportion? That will probably tell you whether the organisation is dedicated to growing its own people or buying instant success from outside.