The Human Side of Lean

The GM Debacle and what to learn from Toyota

If you open any newspaper today, you most likely will find an article about General Motors GM, explaining – or at least trying to explain – in detail why GM is currently in such desolate situation. To make it even more interesting, some of these articles compare GM & Ford with Japanese car manufacturers - mainly with Toyota - and they try to explain the differences: Why is it that GM and Ford are losing market share in breathtaking speed and Toyota gains double digit market shares at the same time?

Depending on what paper or magazine you open, commonly used explanations for GM’s current situation include:

• Huge pension liabilities dated back to the times when lots of money was made on cards and significant commitments toward the unions were made so everyone could have a happy life
• Enormous health cost liabilities to their current and retired workers, totaling up together with the pension liabilities to $2,500 - $3,500 per car
• Higher overall costs in North America that cannot compete with Asian costs
• Independent dealer network who “does not know how to sell cars…”
• Extremely good marketing of Toyota that makes cars increasingly attractive
• GM’s “gas guzzlers”, especially the SUV’s in combination with increasing gas prices make consumers more sensible
• Toyota is subsidized by the Japanese government with consequential lower total costs per car
• Toyotas hybrid cars – that are also subsidized by the Japanese government – take GM’s market away
• etc. etc.

Only to make it clear, this is not my opinion!

The current GM situation is surely not easy to handle, since certain actions should have been taken years or decades ago and – to make it even worse – GM’s recovering strategy is still not clear. GM is experiencing – and Ford as well - a situation or better “the effects of causes" that lie much deeper than obvious.

How is this possible?
Well, Toyota - they say the world’s #1 car manufacturer in 2010, but Daniel T. Jones just announced that that already “this year Toyota will almost certainly overtake GM to become the number one in the global car industry” - has developed a unique and extremely successful enterprise philosophy over the last almost 50 years! This so called “Toyota Production System TPS” is primarily based on Lean & Six Sigma principals but most importantly TPS managed to address the “Human Factor” and consequently the company culture in a remarkable way.

Please go to http://www.juergenboenisch.blogspot.com/ to read the whole story. Your comments are welcome!

Most people know that I counsel focusing SME's efforts on manufacturing. Yet, it is worth noting that in the recent transit strike in New York, the greatest problem noted by workers was the lack of respect and trust between management and workers. This perception is supported and documented by the unusual number of grievances and disciplinary actions among workers, management and the union. The cost? Millions. How many times is the same equation seen in manufacturing organizations?

PRELIMINARY AGREEMENTS

Mission:
The help our customers succeed in implementing a Lean Enterprise by providing them knowledge on the Human Side of Lean.

Our Customer:
Anyone who has chosen to champion or implement Lean” techniques.

Strategies:

To develop tools and/or a road map that Lean implementers can use.
These would be jump started using a previously developed mind map as well as ideas brought up in this session and future sessions.
Some suggested ideas were:
A road map to succeed tool.
A culture categorization tool.
A culture measurement tool.
A tips and tricks tool for implementers.
A management methods tool.
A behavior profile tool. (Or use an existing ie. Myers Briggs, DISC etc.)
A “How to create challenging meaningfull work” tool.
An engage the workforce tool.
An assessment tool for hiring.

To create a rapid response team
The idea was to use the groups knowledge to problem solve stalled implementations.

To present at conferences or write articles
Perhaps based on some of the developed tools.

How do we balance culture change with tool implementation?
Change the culture first? When to introduce Lean tools? Study psychology?

How to Get Management on Board?
Train Management first? Create / Hire top team? How do we keep it from collapsing?

How Do We Make Measurement and Rewards Support New Desired Behaviors?
On the floor? In the office? On the balance sheet?

How Should We Engage & Stimulate Employees? Possible Tools:
Quick & Easy Kaizen, Employees as teachers (e.g. "Training Within Industry"), Reward systems, Employee development & Training

What Would Deming Do?
What are the systems we should be looking at? How do they interact as a whole?

This group intends to create a Lean Implementation Model and/or a Lean Culture Assessment tool. The work may be documented and disseminated through future articles, books, presentations, meetings, and webinars.

Lean is more than a collection of tools. Its heart is people learning and improving together.
The human side of lean is often glossed over, resulting in painful implementations and the lack of sustainability.