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So the philosophy is really a very broad picture of what will it take to make our company great for the long term so that it will outlive us and continue to be great.
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And then we have an idea of satisfying customers, and now we need a way to do that, and we need a delivery mechanism.
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And the delivery mechanism is a whole series of processes in your organization.
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Whatever organization you have, whatever your customers want.
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In healthcare, there's many, many different processes that directly affect the customer, for example.
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So being operated on, that's a very value-added activity.
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Having a blood test taken and then quickly getting the results of that blood test will add value.
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Those are different processes that have a direct impact on the patient.
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In addition to that, there are many supporting processes.
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There are people who have to prepare the operating room for the surgeon.
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There are many processes, all of them can be improved, and they can be improved by reducing lead time, they can be improved by reducing variation and making a more predictable product that can be improved by better understanding what your customer wants and better providing that.
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So there's a process, and there are some tools in the toolkit of Lean that will help you to improve that process so it better delivers value for the customers.
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And uh these processes, unfortunately, to make our lives difficult, cut across what we normally think of of different as different departments.
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So in a vertical organization, life is pretty good.
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I want one thing, lower cost components, of course, that are high quality and delivered on time.
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That's a given.
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So I want my suppliers to perform, but I want them to do it at a low cost.
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And I can then measure that very easily, and I can judge you as a subordinate based on whether you're delivering that.
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And you as a subordinate know exactly how you're measured and what and you what you need to do is within your control.
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You need to get a lower piece part price, you know how to do that, you negotiate hard with suppliers, and also you know that you can play some games about how you categorize parts and there's various ways to make the numbers look good, even if in fact you have really reduced costs.
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So supervisors are managing people to specific functional targets within that chimney, and they feel c in control because they they're measuring just a few simple things they control, and then the people know the game that they need to play to make the numbers look good.
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Now that's actually a type of culture, it's a culture of making the numbers of rising in the hierarchy, and it becomes a purchasing culture or a sales culture.
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The customer, frankly, just doesn't care.
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The customer can care less what kind of games you're playing with your suppliers.
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The customer cares about the product you deliver to them, the cost, the quality, the innovation in the design of the product, how well they're treated when they have a problem, so they care about the service organization, they care about what impacts them.
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What impacts them is not only happening in one department, and often what impacts them depends upon collaboration across those departments.
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So for example, if purchasing is trying to get the lowest price possible for each piece, and engineering is trying to solve a specific customer problem which requires an exotic part that only a small number of companies in the world can make well, they're going to be in conflict with purchasing.
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Because purchasing wants the low-cost producer, and engineering wants the high-quality producer that's capable of making this special part.
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So what you start to find horizontally is conflict across the value stream that the customer actually cares about.
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The horizontal focus, therefore, becomes processes that cut across with a purpose in mind.
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And the purpose is to satisfy customers, its overall quality cost, and delivery, as well as internally safety and route.
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So you have a bigger set of variables to try to manage to, and you have to work with other people, and suddenly life's not so fun and easy.
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You gotta think.
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Thinking isn't fun, it's hard work.
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You have to talk to other people and cooperate with them.
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That could be a real pain.
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And really the only way that you can do that horizontally and actually get better as an organization, this idea of continuous improvement, is if you're solving problems, because problems always come up.
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They come up inside a chimney, inside of purchasing, but they come up big time across the company.
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So now you want these same people who have for years figured out how to game the system and lie and cheat to suddenly become honest and tell you what their problems are.
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Big cultural change.
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So now people's ingenuity you want to be channeled, that same ingenuity that allowed them to make the numbers look good, even though the process was terrible.
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That ingenuity is going to be used to make the process a great process.
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And the supervisors, instead of just controlling people through the numbers, are actually going to work with people to solve problems.
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You can see that this is a dramatic, we're basically turning the organization on its side and dramatically changing the way people think, what people do, and the way they relate to each other, and the way they think about their role in the company.
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Not a trivial thing.
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The tools like ISG mapping, if used properly, can really help a group of people understand the current condition, how badly they're working together across organizations, where the waste is, and what they have to do to work more effectively to satisfy customers.
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Here's a way of thinking about lean.
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We start out by asking what is the process, and we take in some things and we put out some things.
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So there's inputs and outputs.
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Now, in a traditional process, the inputs are in the form of a bundle of inputs, a batch that is inventory.
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And again, that could be information inventory.
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We've got a big inbox on my email, or I'm getting all these reports from engineering, all these test results from the laboratory, or it could be a small amount of inventory.
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But usually it's it's pretty big.
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And then we keep on producing based on our own logic, what we have available to us, what our priorities are, and then we push out stuff, information, product, service, and it waits for somebody else to pick it up and use it.
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So it's inventory in, inventory out of a process.
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So we can build on that, and what really happens in a company is there's lots of processes, and they're all kind of independently working based on their metrics, based on what they do.
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Purchasing is purchasing.
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The stamping department is making steel parts a certain shape, the paying department is painting them, the accounting department is generating reports.
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So you have all these disconnected processes, and they're all working from inventory and they're all building to inventory.
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Now, one thing we know about inventory, we learned that from today's owner, the founder of the production system, is that inventory hides problems.
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As long as I'm busy working and doing stuff and I'm not directly connected to my customer, my immediate customer, I can be happy and ignorant.
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I don't have to know that in fact I'm not providing the information in a good form, and they're struggling to figure out what I was really trying to say and where in this report is really what they need.
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And they're all doing that.
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I could be ignorant of it and think I'm doing a great job.
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And I'm busy, I'm fighting fires, I'm working, and I'm a good person because I'm doing a lot of good work.
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So the inventory and the disconnection between these processes actually hides the problems, allows people to stay within their silo.
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So the bigger that buffer, whether it's a time buffer or a physical buffer, or a buffer of a lot of different reports or a lot of different analysis results, that gives you some breathing room to solve the problems, to be delayed.
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Literally, when you get to one piece flow, you're generating exactly what the next process needs, what the next person needs, you're getting exactly what you need.
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And when anybody stops, everything stops.
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And it's immediately visible.
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And suddenly everybody's looking at you because you stop the process.
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So in that case, that's when the problems are really visible.
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Now the problems could be small, medium, and large.
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That's what we mean by that.
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It could be that there's a basic problem in how we schedule the whole operation.
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It could mean that I the parts aren't oriented right and I pick them up wrong and I put them in in the opposite direction, and therefore I cause a quality problem.
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So there's a lot of problems, and then you have to prioritize those problems.
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And part of prioritizing is not simply we work on the big problems and we ignore the little problems.
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It's also an assignment process that we assign priority, but we also assign who works on it.
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The little problems can go to the work group.
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The bigger problems might have to go to senior management and to specialty organizations like planning and schedule.
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Okay, so you're sorting and you're assigning, and then people have to take on the responsibility to then go through the problem solving process.
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So next step after we have problems and they've been surfaced and we have some prioritization, and we show Hosh and Conry there as which we'll talk about later, but that's an that's a method for prioritizing.
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It's my goals for the year.
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It's the annual plan that helps me to decide what I should focus on, what's more important.
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And now we're dropping them into these plan to check act, the little coins are our plan to check act circles.
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And now we have this bucket of problems that are low priority that we're going to put off to the side, so we're not solving all the problems.
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Now we've got to cycle through plan to check act.
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And then the next step after that is that we have to, in the process of doing Plan to Check Act, we are doing two things.
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One is we're improving the processes themselves to make them more lean, more consistent, higher quality on time, and we're at the same time developing people, and people are doing the problem solving.
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And as we mentioned, if there's visual management like the board shown there, and people are seeing the board and seeing where they're red and where they're green and where they're yellow, then it's clear where there are problems, and that will can help.
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And and the right people with the right leader can then start to use the slow thinking, good type of problem-solving process to actually solve the problems.
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So then what's going to happen is that fewer problems are going to bubble up because we've solved the problems.
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Then what we're going to do is we're going to stress the system by actually reducing the inventory, making the processes even more connected.
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Now you've got a day instead of a week to deliver this.
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Tomorrow you're going to have a half day, and then you're going to have an hour.
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And as you compress the process, the steps become more tightly linked, and the problem, even smaller problems, will come up really fast.
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So, really, what you often see is that we talk about low-hanging fruit.
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The low-hanging fruit are the big problems that just jump out at you.
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And as you solve those big problems, you get into smaller and smaller problems.
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For example, standardized work is at a very detailed level.
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It's dealing with very small problems, whereas overall scheduling is dealing with a very big problem.
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But you eventually need to get down to those little problems to really get the almost perfect quality that many companies want.
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Welcome everyone.
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Today we're going to dive into integrated lean systems.
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And one of the most important ideas in lean leadership is that processes are the delivery mechanisms of the value.
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If we want a satisfied customer, we need a system that consistently delivers what they what they really care about.
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They care about what?
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Quality, cost, delivery, innovation, service.
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And that system isn't built on departments, it's built on processes.
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Yeah, that's really good.
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That's right, Tom.
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So Jeff Liker said we need a delivery mechanism for value.
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And that delivery mechanism is process.
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So lean begins with philosophy, a long-term thinking.
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And I know we got lots to talk about in businesses today related to the lack of long-term thinking.
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It's about building an organization that outlives us.
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It's about developing people while continuously improving processes.
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But philosophy alone isn't enough.
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We need a practical way to deliver value.
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And that delivery mechanism, of course, is process.
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When you add up enough process steps, you get a system.
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Every organization, whether it's healthcare, manufacturing, service, education, delivers value through a series of interconnected processes.
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Very true.
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And those processes exist everywhere.
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For instance, in a hospital, surgery is added value added because the patient is willing to pay for the outcome.
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Well, normally they are.
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While pre prep and labs support the value system, the value stream, they're not actually value added to the customer, right?
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To the patient.
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If any step in the value stream breaks down, the customer experiences delays, defects, waste, and these are all regardless if you know when it occurred or where it occurred.
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It can lead to reduced lead times.
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So what do we do?
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Well, we need to reduce or improve our lead times, which will inevitably improve flow by eliminating waiting time, non-value added steps in the process, and reducing variation.
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But there's there that here's where the things get difficult, isn't it, George?
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Oh, yeah.
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Okay, I'm gonna say, just from my experience, 99.9% of the companies I've been in are structured vertically.
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In other words, there's an engineering department, purchasing department, vertical.
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So purchasing may have goals, engineering has goals, accounting has goals.
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Each department operates almost independently of others, but the customer doesn't care where their process steps go through.
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They don't care that you're built-in a silo, they care that they get their product quick and fast.
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And when you're measured strictly by the numbers, there is a tendency to cheat.
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Okay.
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This is where people, we call it gaming the system.
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What impacts the customer is collaboration across departments or the lack of collaboration across departments.
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In horizontal organization, the focus shifts.
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The focus becomes process and purpose.
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Leaders focus on the work itself.
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Problems are made visible because they got connected process steps.
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People's ingenuity is used is used to improve the system, not game the system.
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And here's one of the important things and principles is inventory.
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Whether it's paper inventory, you got steps or physical inventory, it hides problems.
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That's why you want your process steps close together.
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These buffers create breathing room and problems just fester.
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They allow problems to stay hidden.
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And as long as these problems are hidden, you may you may never get to the downstream or upstream struggle others have.
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Okay, lean is about, and lean leadership is about intentionally creating that visibility, not blaming people and not developing people to their minimal amount.
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Once problems surface, we prioritize them.
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That's where we were talking about Hoshan Conry at one point.
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You prioritize the big problems, you put them into, I think he called it a PDCA coin, but that's really saying we need a deployment leader.
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We got to fix this problem.
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It's going to require more than your superficial attention.
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So as we improve using the PDCA process, we are putting together an integrated lean system.
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It's not about the tools alone.
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So they are about connecting processes across departments, making problems visible, prioritizing wisely, and developing people through disciplined problem solving.
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Problem solving is the dynamic of the Toyota way.
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And sometimes we don't appreciate that it should be that the dynamic in our company.
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Problem solving does two things.
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It'll improve the process steps, plus it'll improve the people solving the problems.
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So, and when done correctly, it builds an organization capable of sustaining excellence long term, not short term.
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True.
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George, one thing that really stands out to me is how uncomfortable this transition can be for some leaders.
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It's not easy.
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You know, you go from strategy from the higher level strategy, and you go down, and it's where the processes start to happen.
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That's where the breakdowns start to happen with the with the uh middle managers.
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And then it goes down to the to the people that actually do the work, the value added.
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And and and we wonder why things why things uh don't don't work the way they're supposed to.
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Why at the end of the year our we didn't meet our goals.
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Well, we didn't meet our goals because we didn't work as a team.
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Traditional management lies on local metrics where lean exposes this the system performance.
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In a vertical structure, like you mentioned, leaders optimize their sty their silo.
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Often they expose at the expense of the overall value at the overall value stream.
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Lean connects processes into in, making system level waste and constraints visible.
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Lean leadership requires embracing visibility and letting go of false control.
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Reduce inventory, like you mentioned, because it ref it removes the buffer that hides all the problems.
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Lean leadership from controlling outcomes to improving processes through the PDCA and development of people.
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How do leaders manage that tension between comfort and transparency, George?
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Yeah, well, pretty poorly today.
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What we've got is a lack of transitional strategy going from a vertical organization to a horizontal organization.
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We don't think about how tough it is that this particular leader has been doing this job for 20, 30 years, and now all of a sudden, you know, they've gamed the system for 30 years.
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Now all of a sudden, they're being asked to expose problems that they really never wanted to expose in the past.
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It's impossible for them.
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So you gotta go slow.
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You gotta teach them that problems are treasures, and exposing a problem is what you got to give them a pat on the back for versus going out and going after them.
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It's a real dynamic that that I really think leaders won't get until somebody at the top of the organization says, look, we're gonna change.
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And that means I need to change as a leader.
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So the leader must be calm, structured, problem-solving approach, and they have to have that.
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And you know, instead of asking who missed the target, we ask what condition in the process allowed this to happen.
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Instead of focusing on the person to blame, we're focusing on the process that's to blame and the standard that we currently have.
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So this is a profound shift, doesn't happen easily.
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Many times you need you need that facilitator to do do it, help you with it.
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That's what Tom and I do for a living.
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So this is this is a problem.
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So that's how leaders move from managing numbers to developing people, and that's how sustainable excellence is created.
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Absolutely.
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Okay, so before we move to our coaching questions, I want to personally invite all the coaches listening today to pop in.
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And we're gonna we're gonna start slow.
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And this requires reflection.
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You know, something we discussed might have raised some interest in our coaches.
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So before we start, Kyle, any thoughts?
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And Jose, any thoughts?
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I guess one of the things that Tom had mentioned was the uncomfortable shift from vertical to horizontal kind of culture.
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And I remember when we went through that about five years ago or so, we lost about half of our staff.
00:23:06.700 --> 00:23:15.899
I'd like to believe that it's just they weren't the right cultural fit for the kind of place where they're expected to perform and continue to grow and challenged all the time.
00:23:16.139 --> 00:23:19.420
Maybe they just weren't meant to be in a company like that.
00:23:19.579 --> 00:23:28.940
But I'm curious if there's other things that you've seen in that shift in other companies that they avoided losing any people or other problems they might have encountered.
00:23:29.259 --> 00:23:31.259
You know, Kyle, that's that's really good.
00:23:31.500 --> 00:23:35.339
That's that's really what Jim Collins said in Good to Great, right?
00:23:35.500 --> 00:23:43.099
It's every person, every person has a seat on the bus, but you don't put them in that seat just because.
00:23:43.339 --> 00:23:47.420
And if they can't handle it, well, they're gonna have to get off the bus, right?
00:23:47.899 --> 00:23:49.339
Or move to another seat.
00:23:49.659 --> 00:23:52.299
Or move to a seat where that they can do.
00:23:52.779 --> 00:23:53.420
Yeah.
00:23:53.659 --> 00:23:56.779
And you know, that's not comfortable for people.
00:23:56.940 --> 00:24:03.500
What happens is we promote people because they're good people, we like them, but then we don't train them.
00:24:03.659 --> 00:24:07.819
We just say, hey, I like this guy, so I'm gonna get I'm gonna make him this position.
00:24:07.899 --> 00:24:09.579
He gets a raise, great.
00:24:09.819 --> 00:24:11.019
Everybody's happy.
00:24:11.180 --> 00:24:12.220
No, they're not.
00:24:12.700 --> 00:24:13.980
Because people talk.
00:24:14.220 --> 00:24:15.180
Everybody talks.
00:24:15.259 --> 00:24:23.099
They're all of the people that are his subordinates are gonna say, yeah, the only reason this guy has a job is because you know he's friends with the boss.
00:24:23.420 --> 00:24:38.779
That made me think of maybe one of the symptoms that we had back then was we'd have the owner that would come in and and and save the day all the time, fix any problem, no matter what, however, anyone was performing, it was okay.
00:24:38.940 --> 00:24:41.099
Let me come in and try to help make it better.
00:24:41.339 --> 00:24:43.579
No one was held accountable for anything.
00:24:43.819 --> 00:24:46.460
Uh, it didn't mean that they would get fired if they made a mistake.
00:24:46.539 --> 00:25:09.339
It was like if anything went wrong, it's like that's okay, we'll just I'll figure it out, or someone else will take it over instead of realizing that when people could be held accountable, it means we expect you to acknowledge the the thing that went wrong and come up with an idea of something you'd want to try differently, and that's holding you accountable to doing something, right?
00:25:09.579 --> 00:25:12.619
Where that wasn't the way it was before in our company, right?
00:25:12.700 --> 00:25:13.659
So Yeah.
00:25:13.980 --> 00:25:17.740
You know what, to to your credit, Kyle, you're you're a great leader that way.
00:25:17.980 --> 00:25:18.299
Okay.
00:25:18.940 --> 00:25:29.980
So, you know, sometimes you gotta go slow to go fast, and that's just the way that's just the way it is when you're building capability in an organization.
00:25:30.539 --> 00:25:32.859
Okay, Tom, I think you got the first question.
00:25:33.019 --> 00:25:33.659
Go ahead.
00:25:34.059 --> 00:25:34.619
Yeah.
00:25:34.859 --> 00:25:43.019
So, first question is what's the true delivery mechanism in your organization, and how clearly do your people understand it?
00:25:43.339 --> 00:25:56.139
Okay, so in our organization, the true delivery mechanism is our end-to-end-to-end customer fulfillment process from initial inquiry through design, production, and delivery.
00:25:56.859 --> 00:26:01.019
The entire chain of activity is what actually delivers value.
00:26:01.259 --> 00:26:04.940
However, most of our people don't think in those terms.
00:26:05.099 --> 00:26:10.379
They see the reparament as the delivery mechanism because they work by themselves.
00:26:11.579 --> 00:26:19.180
Engineering believes in its design, operation believes production is it, sales believes is closing deals.
00:26:19.500 --> 00:26:23.339
So they working vertically, right?
00:26:23.659 --> 00:26:27.819
Because we are not consistently thinking in terms of the full process.
00:26:28.059 --> 00:26:32.059
We don't see the voice of the customer or what the customer needs.
00:26:32.139 --> 00:26:36.059
I'm just focusing on what I need to do, I just follow orders.
00:26:36.139 --> 00:26:38.299
This is what I have to do, that's what I deliver.
00:26:38.539 --> 00:26:40.139
Alignment sometimes breaks down.
00:26:40.619 --> 00:26:48.700
If we made the entire value stream visible and talk about it regularly, I believe understanding will improve significantly.
00:26:49.019 --> 00:26:50.299
Yeah, very, very good.
00:26:50.700 --> 00:26:53.659
So, Kyle, how would you describe your organization?
00:26:53.740 --> 00:26:56.220
And I think this goes to all of our listeners.
00:26:56.539 --> 00:26:58.700
If you had the homework, this is it.
00:26:58.859 --> 00:27:06.460
How would you describe your organization as primarily, would you describe it as primarily vertical or horizontal?
00:27:06.700 --> 00:27:09.259
And what evidence do you have that that's the case?
00:27:09.579 --> 00:27:16.139
Well, I would say, like, as I just mentioned earlier, like five years ago and before that, I would say it was very vertical.
00:27:16.379 --> 00:27:24.220
It was every department or discipline was looked at as its own individual delivery system.
00:27:24.539 --> 00:27:29.259
It was judged on how well it did in its own way in isolation.
00:27:29.500 --> 00:27:45.659
I believe that we ended up transitioning away from that and developed a system that's way more focused on customer value, overall metrics related to the inputs and the outputs that have nothing to do with one person delivering a specific task.
00:27:45.819 --> 00:27:56.619
Um there's a book that I would I'm just reading right now, and they have the example for a hospital that had like the worst patient customer rating in all of the country.
00:27:56.940 --> 00:28:02.220
And they when they talked about everyone that worked in the hospital, the doctors were the caregivers.
00:28:02.779 --> 00:28:05.980
And everyone else was an orderly or a nurse or whatever.
00:28:06.220 --> 00:28:15.420
But the new CEO that came into that hospital said they made badges for all 40,000 of their employees that said caregiver.
00:28:15.740 --> 00:28:16.859
And they were all caregivers.
00:28:17.180 --> 00:28:27.980
Whether you're getting the bandages for the doctor or whatever you're doing, you are helping, you are a caregiver and doing something that another person couldn't do their job if you weren't doing your job.
00:28:28.139 --> 00:28:44.299
And everyone saw themselves as caregivers and transitioned that entire Hopsable hospital into being the number one ranked in the country because everyone had that holistic view of that purpose and and not being an individual with a specific different deliverable.
00:28:44.539 --> 00:28:49.659
If that does that relate to the question, oh yeah, but the that's that's clarity.
00:28:49.819 --> 00:28:50.539
Clarity.
00:28:50.700 --> 00:28:57.259
I mean, everybody is there to service the patient, and that's a patient first strategy.
00:28:57.500 --> 00:28:58.379
Can you imagine?
00:28:58.460 --> 00:29:05.659
And and that is horizontal because every process delivers value, and they're connected processes.
00:29:05.740 --> 00:29:14.220
It's amazing when you lay out the clarity like that, like we're all in it for the customer, we're all there for the customer.
00:29:14.299 --> 00:29:18.379
It's not the doctor only, and everybody else services the doctor.
00:29:18.619 --> 00:29:22.299
Changed it and turned it upside down where they put the customer first.
00:29:22.539 --> 00:29:23.339
Makes a lot of sense.
00:29:23.500 --> 00:29:23.899
Good answer.
00:29:28.220 --> 00:29:31.740
In my company before, and George, you would remember this.
00:29:31.980 --> 00:29:36.220
We used to have this program that was our CAP program, CAP.
00:29:36.299 --> 00:29:38.059
It was our change adoption program.
00:29:38.220 --> 00:29:51.819
And we had this nice little online form you'd fill out with seven fields, you'd submit it, and then we'd have executive meetings every week that we'd review what's submitted and choose which ones to approve for opportunities for continuous improvement.
00:29:52.059 --> 00:29:59.819
What ended up happening is I think we have a had a backlog of about 60 of these forms that were submitted that we hadn't made a decision on yet.
00:30:00.139 --> 00:30:17.099
George introduced us to the MOSI, the MyOne Small Improvement Forum, and we ditched everything that we had, adopted that, where everyone now had the authority to identify any opportunity to improve or any problem, try something, fill out the third part that says, what happened, right?
00:30:17.339 --> 00:30:20.859
And we just put that up on a digital board that everyone had access to.
00:30:20.940 --> 00:30:27.899
And then every week, if there's any Moseys on there, we have a chance to review and highlight and discuss any improvement that was attempted, right?
00:30:27.980 --> 00:30:36.619
And it reduced it to a zero backlog of improvements and 60 improvements being made instead of a backlog in that same amount of time.
00:30:36.859 --> 00:30:50.059
So I think we now have evidence of a lot of examples of things that make our company horizontal today, where we have those annual, quarterly, monthly reviews of our 64 chart from Harada.
00:30:50.539 --> 00:30:55.099
And we pull from that in what our top three priorities are every day.
00:30:55.339 --> 00:31:22.059
We use our daily diaries, we use our routine builders, um, we have weekly review of gratitude board and and the aha board, and we have this system now of these routines or these pulses that all of these activities and tools that we've learned, mostly through George, we've now baked them into the way we do things, our system, or all these things that become, if someone joins in, this is just the way it's done.
00:31:22.220 --> 00:31:38.700
And when we review our every day, every week we update a 13-week scorecard that has all the metrics that matter to the company overall, relates to customer value, customer engagement, it relates to the improvements that are made, the changes in the rates of how things are changing.
00:31:38.859 --> 00:31:40.779
And those are company-wide things.
00:31:40.859 --> 00:31:43.740
It's not discipline related or department related.
00:31:43.899 --> 00:31:47.259
And everyone's involved in updating those and reviewing those every week.
00:31:47.420 --> 00:31:50.220
So we all have a sense of what's going on for the company overall.
00:31:50.299 --> 00:31:57.980
And there's probably a dozen more of those tools that we have baked into, whether it's daily, weekly, every two to three weeks, every month, every quarter.
00:31:58.139 --> 00:32:07.500
That it's just all those things keep us all aligned and all contributing without any one person having to come in and do something because everyone has the authority to do it now.
00:32:07.819 --> 00:32:08.220
Very good.
00:32:08.299 --> 00:32:12.299
So, Kyle, that's working to that's working together to service the customers.
00:32:12.379 --> 00:32:13.180
So, way to go.
00:32:13.339 --> 00:32:14.859
Tom, you got the next one.
00:32:15.099 --> 00:32:15.659
Yeah.
00:32:15.899 --> 00:32:20.139
So, Jose, where in your organization is the inventory hiding problems?
00:32:20.299 --> 00:32:25.980
It can be physical or informational, but where's it hiding your problems?
00:32:26.299 --> 00:32:33.339
Yes, in our organization, we definitely have lots of inventory, physically and information.
00:32:34.460 --> 00:32:40.460
On the physical side, you know, we carry excess working process uh between production steps.
00:32:40.619 --> 00:32:48.539
We have large amounts of raw inventory, in-process inventory, just to make sure that the next step they have work.
00:32:49.180 --> 00:32:59.259
But instead of you know working against this, we don't see the problem, the real problems like quality problems, like uh the design problems.
00:32:59.420 --> 00:33:05.980
We don't see those problems because they are hidden because the operation, the next operation that has always something to do.
00:33:06.379 --> 00:33:09.339
So we have a huge amount of inventory.
00:33:09.500 --> 00:33:22.059
On the informational side, we have a large backlog of emails, reports, and approvals, cues that create a big buffer where miscommunication and unclear expectations sit without being addressed.
00:33:22.220 --> 00:33:29.819
You know, that could that create delays for the customer, you know, delays on paperwork, even for the shipping department.
00:33:29.899 --> 00:33:39.899
They cannot ship because they haven't received the full information, because credit didn't approve, because credit is waiting for some approvals from some signatures or you name it.
00:33:40.059 --> 00:33:47.740
So it's not only the physical inventory, but also the transactional inventory, which can also huge inventory can create big delays.
00:33:47.980 --> 00:34:04.539
If we definitely reduce those buffers, I believe many issues will surface quickly, and that will force us to resolve it by going analyzing the root causes instead of managing around these problems, these hidden problems.
00:34:04.859 --> 00:34:09.099
Yeah, so the bigger the company, it seems like the bigger the problems.
00:34:09.340 --> 00:34:14.619
Jose, how large a company do you have, and what are you responsible for?
00:34:14.700 --> 00:34:18.780
So our listeners can get an idea of what you do.
00:34:19.500 --> 00:34:23.500
So the company overall is about 22,000 employees.
00:34:23.740 --> 00:34:38.460
The business unit I am I work working is has about uh 8,000 employees, and I am in charge of the leading the continuous improvement initiatives for seven production plants in the United States.
00:34:38.780 --> 00:34:46.139
Yeah, so it's difficult when it grows and people get comfortable, it's hard to break through those vertical silos.
00:34:46.300 --> 00:34:48.619
Okay, my next question is for Kyle.
00:34:48.860 --> 00:34:58.300
When problems surface, Kyle, do your leaders respond by controlling through the numbers or by coaching through problem solving?
00:34:58.460 --> 00:35:02.619
And I'm gonna add, at the gimba, do they go and understand?
00:35:02.699 --> 00:35:07.739
Yeah, I don't think coaching through problem solving makes any sense unless it's at the Gemba.
00:35:07.900 --> 00:35:15.019
There was something that I heard is like, let the plant, let the Gemba be your teacher.
00:35:15.179 --> 00:35:16.619
And I think people forget that.
00:35:16.779 --> 00:35:17.900
Go ahead, Kyle.
00:35:18.219 --> 00:35:25.019
Well, yeah, and for my company's Gemba is not a physical plant doing manufacturing, right?
00:35:25.179 --> 00:35:32.860
We might have an app or we would have a process documented on Miro board or we'd have collateral as a PDF.
00:35:33.019 --> 00:35:35.099
So a lot of our things are touch points.
00:35:35.259 --> 00:35:38.779
They're not necessarily a manufacturing facility.
00:35:39.019 --> 00:35:49.019
So if something goes wrong and there's an opportunity or something goes off of not expected, we again go to our tools that we have baked into our system.
00:35:49.179 --> 00:35:54.779
So if something goes wrong, the person that encountered it may just fill out a Mosey and try something else.
00:35:55.019 --> 00:36:00.059
We have in-the-moment coaching and we have weekly coaching sessions that are scheduled.
00:36:00.300 --> 00:36:03.500
So if anything goes wrong in the week, we hey, how'd the week go?
00:36:03.579 --> 00:36:05.579
It's like, oh yeah, something went wrong.
00:36:05.659 --> 00:36:06.860
It's like, well, let's look at it.
00:36:07.019 --> 00:36:08.219
Like, let's talk about it.
00:36:08.300 --> 00:36:15.099
And and then maybe from there they have enough from the talk and to say, okay, I'm gonna try a Mosey and we'll review next week how that goes.
00:36:15.340 --> 00:36:18.779
So I and again, before we never had any coaching, right?
00:36:18.860 --> 00:36:21.099
It was all you have a problem, I'll fix it.
00:36:21.259 --> 00:36:21.420
Right.
00:36:21.659 --> 00:36:41.500
So now it's more of the uh let's look at what the situation is and and try to relive it if we can, if it's possible, in that scenario, uh recreate it, and then talk about it and make them feel like they have the ability to come up with ideas to solve it, and I don't give them answers anymore uh to try to help them develop that skill.
00:36:41.739 --> 00:36:47.980
Yeah, you know, Kyle, I'm I'm thinking about something and I think it's a little profound, right?
00:36:48.219 --> 00:36:53.900
This is where I would write it down and uh you know, log it somewhere and put it in my next book.
00:36:54.139 --> 00:36:56.539
We don't need a learning organization.
00:36:56.779 --> 00:36:57.340
We don't.
00:36:57.500 --> 00:36:59.340
This is what everybody's going after.
00:36:59.500 --> 00:37:00.619
That's the result.
00:37:01.099 --> 00:37:05.659
We need a great coaching organization like the one you're providing.
00:37:05.820 --> 00:37:07.019
So way to go co.
00:37:07.420 --> 00:37:11.259
Well, and by coaching, people are learning.
00:37:11.500 --> 00:37:14.300
So yeah, that's that's you're absolutely right.
00:37:14.619 --> 00:37:16.380
The coaching is what what matters.
00:37:16.699 --> 00:37:19.900
And maybe the learning is the output and the coaching is the input.
00:37:20.460 --> 00:37:25.900
Yeah, the input is is coaching, the output is is learning from the gimbal, like George said.
00:37:26.139 --> 00:37:28.139
Jose, next question is for you.
00:37:28.300 --> 00:37:34.860
How are you prioritizing your problems and are they aligned with your long-term vision and annual objectives?
00:37:35.099 --> 00:37:49.019
Yeah, well, right now many of our priorities are reactive, and when I say reactive, it's because the biggest problem who pop up today is what we attack, and this is what everybody goes to.
00:37:49.099 --> 00:37:54.059
You know, this is like a firefighting game, because every day we have firefighters.
00:37:54.300 --> 00:38:01.820
We have an annual goal, but the connection, we have some gap in this connection, and that our daily problem solving isn't always clear.
00:38:01.980 --> 00:38:08.059
Uh, not every improvement effort uh ties directly to our long-term vision.
00:38:08.219 --> 00:38:29.019
And and this is because we don't have clear expectations, you know, like if if if we work like on safety, quality, delivery, cost, and teams, and people they're just firefighting issues, they're just going through the day instead of focusing on how can we improve quality, how can I improve delivery, how can I improve cost.
00:38:29.259 --> 00:38:42.460
I'm just firefighting because I have all uncertainty and I I I don't have the process, established process to attack those problems or prioritize these problems.
00:38:42.699 --> 00:38:55.659
To improve, we need clear organization processes, something like aligning improvement work with the strategic objectives so teams understand why certain problems are more important than others.
00:38:55.820 --> 00:39:11.739
If we're sure that we're gonna be delivering more effective, reducing our cost, or you know, resolving quality issues is where we should be, you know, that's the priority, that's the alignment we need to have across the network, across the organization, and the different departments.
00:39:11.980 --> 00:39:17.739
This alignment, alignment will help us to ensure we are not just solving problems, but solving the right problems.
00:39:18.059 --> 00:39:18.779
That's very good.
00:39:18.940 --> 00:39:30.860
And you know, so we're talking when we talk about processes, and in a lot of cases you see where somebody, hey, if I can hide this problem, I'm gonna keep, I'm gonna hide it.
00:39:30.940 --> 00:39:34.139
I'm not gonna, I'm not gonna correct it, I'm just gonna hide it, right?
00:39:34.380 --> 00:39:40.139
George, if you remember, we ran into a a large contractor while we were in Santorini.
00:39:40.300 --> 00:40:10.539
He was a Japanese contractor, and he put up walls, and he would, you know, for for buildings, for you know, large buildings, and he his people on his processes, if something was off on these walls, like on their, they would they would stop and make sure that it was corrected, even though nobody'd ever see it, and it would probably never be found.
00:40:10.699 --> 00:40:19.820
He just had that in his mind on hey, if I let this go and I and the process breaks, it's going to continue to go, right?
00:40:19.980 --> 00:40:21.179
And that's what happens.
00:40:21.340 --> 00:40:26.619
We continually let our processes slide, and we say, that's okay, that's okay.
00:40:26.779 --> 00:40:31.340
We've got it, it you have to make sure your processes re are are followed.
00:40:31.579 --> 00:40:32.139
That's awesome.
00:40:32.300 --> 00:40:33.099
Thank you, Tom.
00:40:33.500 --> 00:40:37.579
That is our session on integrated lean systems.
00:40:37.659 --> 00:40:42.619
And remember, process is the delivery mechanism for value.
00:40:42.779 --> 00:40:44.300
You've got lots to think about.
00:40:44.460 --> 00:40:45.739
Think about your organization.
00:40:45.900 --> 00:40:49.820
Is it a vertical or a horizontal company?
00:40:50.219 --> 00:40:58.940
And if it's vertical, try to get out of that now because you know if it's vertical, you are holding on to way too much inventory.
00:40:59.179 --> 00:41:00.940
Think about a transition plan.
00:41:01.179 --> 00:41:07.659
Give us a call, come join us, talk to us a little bit about your vertical organization for next time.
00:41:07.820 --> 00:41:10.539
This is George Richillis with my partner.
00:41:11.659 --> 00:41:14.539
Yeah, great, and thank you, Kyle, and thank you, Jose.
00:00:32.699 --> 00:00:47.739
So the philosophy is really a very broad picture of what will it take to make our company great for the long term so that it will outlive us and continue to be great.
00:00:47.979 --> 00:00:57.019
And then we have an idea of satisfying customers, and now we need a way to do that, and we need a delivery mechanism.
00:00:57.179 --> 00:01:03.820
And the delivery mechanism is a whole series of processes in your organization.
00:01:04.219 --> 00:01:07.740
Whatever organization you have, whatever your customers want.
00:01:07.979 --> 00:01:14.299
In healthcare, there's many, many different processes that directly affect the customer, for example.
00:01:14.460 --> 00:01:17.900
So being operated on, that's a very value-added activity.
00:01:18.060 --> 00:01:25.019
Having a blood test taken and then quickly getting the results of that blood test will add value.
00:01:25.259 --> 00:01:30.060
Those are different processes that have a direct impact on the patient.
00:01:30.299 --> 00:01:33.259
In addition to that, there are many supporting processes.
00:01:33.420 --> 00:01:37.259
There are people who have to prepare the operating room for the surgeon.
00:01:37.419 --> 00:01:54.939
There are many processes, all of them can be improved, and they can be improved by reducing lead time, they can be improved by reducing variation and making a more predictable product that can be improved by better understanding what your customer wants and better providing that.
00:01:55.099 --> 00:02:04.859
So there's a process, and there are some tools in the toolkit of Lean that will help you to improve that process so it better delivers value for the customers.
00:02:05.099 --> 00:02:14.300
And uh these processes, unfortunately, to make our lives difficult, cut across what we normally think of of different as different departments.
00:02:14.539 --> 00:02:18.060
So in a vertical organization, life is pretty good.
00:02:25.419 --> 00:02:31.740
I want one thing, lower cost components, of course, that are high quality and delivered on time.
00:02:31.979 --> 00:02:33.020
That's a given.
00:02:33.500 --> 00:02:38.300
So I want my suppliers to perform, but I want them to do it at a low cost.
00:02:38.460 --> 00:02:45.500
And I can then measure that very easily, and I can judge you as a subordinate based on whether you're delivering that.
00:02:45.739 --> 00:02:53.739
And you as a subordinate know exactly how you're measured and what and you what you need to do is within your control.
00:02:53.900 --> 00:03:11.900
You need to get a lower piece part price, you know how to do that, you negotiate hard with suppliers, and also you know that you can play some games about how you categorize parts and there's various ways to make the numbers look good, even if in fact you have really reduced costs.
00:03:12.139 --> 00:03:28.139
So supervisors are managing people to specific functional targets within that chimney, and they feel c in control because they they're measuring just a few simple things they control, and then the people know the game that they need to play to make the numbers look good.
00:03:28.459 --> 00:03:40.699
Now that's actually a type of culture, it's a culture of making the numbers of rising in the hierarchy, and it becomes a purchasing culture or a sales culture.
00:03:41.259 --> 00:03:45.099
The customer, frankly, just doesn't care.
00:03:45.340 --> 00:03:49.340
The customer can care less what kind of games you're playing with your suppliers.
00:03:49.659 --> 00:04:05.259
The customer cares about the product you deliver to them, the cost, the quality, the innovation in the design of the product, how well they're treated when they have a problem, so they care about the service organization, they care about what impacts them.
00:04:05.500 --> 00:04:14.299
What impacts them is not only happening in one department, and often what impacts them depends upon collaboration across those departments.
00:04:14.459 --> 00:04:34.300
So for example, if purchasing is trying to get the lowest price possible for each piece, and engineering is trying to solve a specific customer problem which requires an exotic part that only a small number of companies in the world can make well, they're going to be in conflict with purchasing.
00:04:34.379 --> 00:04:43.900
Because purchasing wants the low-cost producer, and engineering wants the high-quality producer that's capable of making this special part.
00:04:44.060 --> 00:04:51.819
So what you start to find horizontally is conflict across the value stream that the customer actually cares about.
00:04:52.060 --> 00:04:58.860
The horizontal focus, therefore, becomes processes that cut across with a purpose in mind.
00:04:58.939 --> 00:05:07.980
And the purpose is to satisfy customers, its overall quality cost, and delivery, as well as internally safety and route.
00:05:08.220 --> 00:05:18.060
So you have a bigger set of variables to try to manage to, and you have to work with other people, and suddenly life's not so fun and easy.
00:05:18.220 --> 00:05:19.500
You gotta think.
00:05:19.660 --> 00:05:21.980
Thinking isn't fun, it's hard work.
00:05:22.300 --> 00:05:25.900
You have to talk to other people and cooperate with them.
00:05:26.140 --> 00:05:27.660
That could be a real pain.
00:05:27.900 --> 00:05:39.500
And really the only way that you can do that horizontally and actually get better as an organization, this idea of continuous improvement, is if you're solving problems, because problems always come up.
00:05:39.740 --> 00:05:45.900
They come up inside a chimney, inside of purchasing, but they come up big time across the company.
00:05:46.060 --> 00:05:58.700
So now you want these same people who have for years figured out how to game the system and lie and cheat to suddenly become honest and tell you what their problems are.
00:05:58.939 --> 00:06:00.060
Big cultural change.
00:06:00.220 --> 00:06:08.460
So now people's ingenuity you want to be channeled, that same ingenuity that allowed them to make the numbers look good, even though the process was terrible.
00:06:08.700 --> 00:06:11.980
That ingenuity is going to be used to make the process a great process.
00:06:12.140 --> 00:06:18.379
And the supervisors, instead of just controlling people through the numbers, are actually going to work with people to solve problems.
00:06:18.540 --> 00:06:34.140
You can see that this is a dramatic, we're basically turning the organization on its side and dramatically changing the way people think, what people do, and the way they relate to each other, and the way they think about their role in the company.
00:06:34.460 --> 00:06:36.140
Not a trivial thing.
00:06:36.300 --> 00:06:52.300
The tools like ISG mapping, if used properly, can really help a group of people understand the current condition, how badly they're working together across organizations, where the waste is, and what they have to do to work more effectively to satisfy customers.
00:06:52.460 --> 00:06:54.700
Here's a way of thinking about lean.
00:06:55.260 --> 00:07:03.100
We start out by asking what is the process, and we take in some things and we put out some things.
00:07:03.260 --> 00:07:04.939
So there's inputs and outputs.
00:07:05.100 --> 00:07:15.660
Now, in a traditional process, the inputs are in the form of a bundle of inputs, a batch that is inventory.
00:07:15.900 --> 00:07:18.220
And again, that could be information inventory.
00:07:18.460 --> 00:07:30.379
We've got a big inbox on my email, or I'm getting all these reports from engineering, all these test results from the laboratory, or it could be a small amount of inventory.
00:07:30.780 --> 00:07:33.580
But usually it's it's pretty big.
00:07:33.900 --> 00:07:49.900
And then we keep on producing based on our own logic, what we have available to us, what our priorities are, and then we push out stuff, information, product, service, and it waits for somebody else to pick it up and use it.
00:07:50.060 --> 00:07:53.980
So it's inventory in, inventory out of a process.
00:07:54.140 --> 00:08:06.060
So we can build on that, and what really happens in a company is there's lots of processes, and they're all kind of independently working based on their metrics, based on what they do.
00:08:06.220 --> 00:08:07.900
Purchasing is purchasing.
00:08:08.220 --> 00:08:16.300
The stamping department is making steel parts a certain shape, the paying department is painting them, the accounting department is generating reports.
00:08:16.540 --> 00:08:25.420
So you have all these disconnected processes, and they're all working from inventory and they're all building to inventory.
00:08:25.580 --> 00:08:35.500
Now, one thing we know about inventory, we learned that from today's owner, the founder of the production system, is that inventory hides problems.
00:08:35.659 --> 00:08:46.539
As long as I'm busy working and doing stuff and I'm not directly connected to my customer, my immediate customer, I can be happy and ignorant.
00:08:46.779 --> 00:08:55.899
I don't have to know that in fact I'm not providing the information in a good form, and they're struggling to figure out what I was really trying to say and where in this report is really what they need.
00:08:55.980 --> 00:08:57.179
And they're all doing that.
00:08:57.259 --> 00:09:00.379
I could be ignorant of it and think I'm doing a great job.
00:09:00.539 --> 00:09:09.339
And I'm busy, I'm fighting fires, I'm working, and I'm a good person because I'm doing a lot of good work.
00:09:09.579 --> 00:09:19.019
So the inventory and the disconnection between these processes actually hides the problems, allows people to stay within their silo.
00:09:20.139 --> 00:09:36.139
So the bigger that buffer, whether it's a time buffer or a physical buffer, or a buffer of a lot of different reports or a lot of different analysis results, that gives you some breathing room to solve the problems, to be delayed.
00:09:36.459 --> 00:09:46.139
Literally, when you get to one piece flow, you're generating exactly what the next process needs, what the next person needs, you're getting exactly what you need.
00:09:46.299 --> 00:09:49.500
And when anybody stops, everything stops.
00:09:49.659 --> 00:09:51.500
And it's immediately visible.
00:09:51.740 --> 00:09:55.259
And suddenly everybody's looking at you because you stop the process.
00:09:55.500 --> 00:09:58.219
So in that case, that's when the problems are really visible.
00:09:58.379 --> 00:10:01.099
Now the problems could be small, medium, and large.
00:10:01.179 --> 00:10:02.219
That's what we mean by that.
00:10:02.379 --> 00:10:06.860
It could be that there's a basic problem in how we schedule the whole operation.
00:10:07.019 --> 00:10:15.579
It could mean that I the parts aren't oriented right and I pick them up wrong and I put them in in the opposite direction, and therefore I cause a quality problem.
00:10:15.819 --> 00:10:20.139
So there's a lot of problems, and then you have to prioritize those problems.
00:10:20.219 --> 00:10:26.299
And part of prioritizing is not simply we work on the big problems and we ignore the little problems.
00:10:26.459 --> 00:10:32.539
It's also an assignment process that we assign priority, but we also assign who works on it.
00:10:32.699 --> 00:10:35.179
The little problems can go to the work group.
00:10:35.419 --> 00:10:43.819
The bigger problems might have to go to senior management and to specialty organizations like planning and schedule.
00:10:43.980 --> 00:10:54.699
Okay, so you're sorting and you're assigning, and then people have to take on the responsibility to then go through the problem solving process.
00:10:54.860 --> 00:11:07.579
So next step after we have problems and they've been surfaced and we have some prioritization, and we show Hosh and Conry there as which we'll talk about later, but that's an that's a method for prioritizing.
00:11:07.659 --> 00:11:08.939
It's my goals for the year.
00:11:09.099 --> 00:11:14.139
It's the annual plan that helps me to decide what I should focus on, what's more important.
00:11:14.779 --> 00:11:25.500
And now we're dropping them into these plan to check act, the little coins are our plan to check act circles.
00:11:25.740 --> 00:11:32.539
And now we have this bucket of problems that are low priority that we're going to put off to the side, so we're not solving all the problems.
00:11:32.779 --> 00:11:35.659
Now we've got to cycle through plan to check act.
00:11:35.740 --> 00:11:44.620
And then the next step after that is that we have to, in the process of doing Plan to Check Act, we are doing two things.
00:11:44.779 --> 00:12:02.459
One is we're improving the processes themselves to make them more lean, more consistent, higher quality on time, and we're at the same time developing people, and people are doing the problem solving.
00:12:02.620 --> 00:12:16.139
And as we mentioned, if there's visual management like the board shown there, and people are seeing the board and seeing where they're red and where they're green and where they're yellow, then it's clear where there are problems, and that will can help.
00:12:16.299 --> 00:12:27.500
And and the right people with the right leader can then start to use the slow thinking, good type of problem-solving process to actually solve the problems.
00:12:27.819 --> 00:12:34.779
So then what's going to happen is that fewer problems are going to bubble up because we've solved the problems.
00:12:34.939 --> 00:12:42.860
Then what we're going to do is we're going to stress the system by actually reducing the inventory, making the processes even more connected.
00:12:43.099 --> 00:12:46.779
Now you've got a day instead of a week to deliver this.
00:12:47.099 --> 00:12:51.179
Tomorrow you're going to have a half day, and then you're going to have an hour.
00:12:51.419 --> 00:13:00.539
And as you compress the process, the steps become more tightly linked, and the problem, even smaller problems, will come up really fast.
00:13:00.939 --> 00:13:05.579
So, really, what you often see is that we talk about low-hanging fruit.
00:13:05.659 --> 00:13:09.259
The low-hanging fruit are the big problems that just jump out at you.
00:13:09.419 --> 00:13:13.500
And as you solve those big problems, you get into smaller and smaller problems.
00:13:13.659 --> 00:13:17.259
For example, standardized work is at a very detailed level.
00:13:17.419 --> 00:13:22.139
It's dealing with very small problems, whereas overall scheduling is dealing with a very big problem.
00:13:22.539 --> 00:13:29.019
But you eventually need to get down to those little problems to really get the almost perfect quality that many companies want.
00:13:29.819 --> 00:13:30.860
Welcome everyone.
00:13:31.019 --> 00:13:34.219
Today we're going to dive into integrated lean systems.
00:13:34.860 --> 00:13:43.019
And one of the most important ideas in lean leadership is that processes are the delivery mechanisms of the value.
00:13:43.819 --> 00:13:52.059
If we want a satisfied customer, we need a system that consistently delivers what they what they really care about.
00:13:52.139 --> 00:13:53.019
They care about what?
00:13:53.259 --> 00:13:56.379
Quality, cost, delivery, innovation, service.
00:13:56.699 --> 00:14:02.059
And that system isn't built on departments, it's built on processes.
00:14:02.299 --> 00:14:03.579
Yeah, that's really good.
00:14:03.899 --> 00:14:04.699
That's right, Tom.
00:14:04.779 --> 00:14:09.339
So Jeff Liker said we need a delivery mechanism for value.
00:14:09.419 --> 00:14:12.299
And that delivery mechanism is process.
00:14:12.779 --> 00:14:16.939
So lean begins with philosophy, a long-term thinking.
00:14:17.099 --> 00:14:23.980
And I know we got lots to talk about in businesses today related to the lack of long-term thinking.
00:14:24.139 --> 00:14:27.099
It's about building an organization that outlives us.
00:14:27.339 --> 00:14:32.539
It's about developing people while continuously improving processes.
00:14:32.939 --> 00:14:35.740
But philosophy alone isn't enough.
00:14:36.059 --> 00:14:39.339
We need a practical way to deliver value.
00:14:39.500 --> 00:14:42.779
And that delivery mechanism, of course, is process.
00:14:42.939 --> 00:14:46.620
When you add up enough process steps, you get a system.
00:14:47.019 --> 00:14:57.019
Every organization, whether it's healthcare, manufacturing, service, education, delivers value through a series of interconnected processes.
00:14:57.339 --> 00:14:58.059
Very true.
00:14:58.219 --> 00:15:01.419
And those processes exist everywhere.
00:15:01.659 --> 00:15:08.299
For instance, in a hospital, surgery is added value added because the patient is willing to pay for the outcome.
00:15:08.539 --> 00:15:10.059
Well, normally they are.
00:15:10.299 --> 00:15:19.259
While pre prep and labs support the value system, the value stream, they're not actually value added to the customer, right?
00:15:19.419 --> 00:15:20.139
To the patient.
00:15:20.299 --> 00:15:31.740
If any step in the value stream breaks down, the customer experiences delays, defects, waste, and these are all regardless if you know when it occurred or where it occurred.
00:15:31.899 --> 00:15:34.059
It can lead to reduced lead times.
00:15:34.219 --> 00:15:35.019
So what do we do?
00:15:35.179 --> 00:15:50.459
Well, we need to reduce or improve our lead times, which will inevitably improve flow by eliminating waiting time, non-value added steps in the process, and reducing variation.
00:15:50.779 --> 00:15:55.980
But there's there that here's where the things get difficult, isn't it, George?
00:15:56.219 --> 00:15:57.019
Oh, yeah.
00:15:57.259 --> 00:16:05.899
Okay, I'm gonna say, just from my experience, 99.9% of the companies I've been in are structured vertically.
00:16:06.059 --> 00:16:10.459
In other words, there's an engineering department, purchasing department, vertical.
00:16:10.620 --> 00:16:15.259
So purchasing may have goals, engineering has goals, accounting has goals.
00:16:15.419 --> 00:16:25.259
Each department operates almost independently of others, but the customer doesn't care where their process steps go through.
00:16:25.500 --> 00:16:30.299
They don't care that you're built-in a silo, they care that they get their product quick and fast.
00:16:30.539 --> 00:16:36.779
And when you're measured strictly by the numbers, there is a tendency to cheat.
00:16:37.099 --> 00:16:37.419
Okay.
00:16:37.899 --> 00:16:41.099
This is where people, we call it gaming the system.
00:16:41.339 --> 00:16:50.860
What impacts the customer is collaboration across departments or the lack of collaboration across departments.
00:16:51.099 --> 00:16:54.939
In horizontal organization, the focus shifts.
00:16:55.099 --> 00:16:58.219
The focus becomes process and purpose.
00:16:58.459 --> 00:17:01.179
Leaders focus on the work itself.
00:17:01.659 --> 00:17:05.420
Problems are made visible because they got connected process steps.
00:17:05.579 --> 00:17:12.620
People's ingenuity is used is used to improve the system, not game the system.
00:17:13.339 --> 00:17:18.380
And here's one of the important things and principles is inventory.
00:17:18.539 --> 00:17:25.339
Whether it's paper inventory, you got steps or physical inventory, it hides problems.
00:17:25.500 --> 00:17:29.019
That's why you want your process steps close together.
00:17:29.259 --> 00:17:33.819
These buffers create breathing room and problems just fester.
00:17:34.220 --> 00:17:36.460
They allow problems to stay hidden.
00:17:36.700 --> 00:17:44.059
And as long as these problems are hidden, you may you may never get to the downstream or upstream struggle others have.
00:17:44.220 --> 00:17:58.539
Okay, lean is about, and lean leadership is about intentionally creating that visibility, not blaming people and not developing people to their minimal amount.
00:17:58.779 --> 00:18:01.579
Once problems surface, we prioritize them.
00:18:01.740 --> 00:18:05.339
That's where we were talking about Hoshan Conry at one point.
00:18:05.579 --> 00:18:14.220
You prioritize the big problems, you put them into, I think he called it a PDCA coin, but that's really saying we need a deployment leader.
00:18:14.299 --> 00:18:15.579
We got to fix this problem.
00:18:15.740 --> 00:18:19.819
It's going to require more than your superficial attention.
00:18:20.139 --> 00:18:29.579
So as we improve using the PDCA process, we are putting together an integrated lean system.
00:18:29.740 --> 00:18:31.980
It's not about the tools alone.
00:18:32.139 --> 00:18:42.859
So they are about connecting processes across departments, making problems visible, prioritizing wisely, and developing people through disciplined problem solving.
00:18:43.099 --> 00:18:46.460
Problem solving is the dynamic of the Toyota way.
00:18:46.779 --> 00:18:52.220
And sometimes we don't appreciate that it should be that the dynamic in our company.
00:18:52.460 --> 00:18:54.220
Problem solving does two things.
00:18:54.460 --> 00:18:59.980
It'll improve the process steps, plus it'll improve the people solving the problems.
00:19:00.220 --> 00:19:08.059
So, and when done correctly, it builds an organization capable of sustaining excellence long term, not short term.
00:19:08.299 --> 00:19:08.700
True.
00:19:08.859 --> 00:19:16.460
George, one thing that really stands out to me is how uncomfortable this transition can be for some leaders.
00:19:17.579 --> 00:19:18.700
It's not easy.
00:19:19.099 --> 00:19:27.259
You know, you go from strategy from the higher level strategy, and you go down, and it's where the processes start to happen.
00:19:27.500 --> 00:19:32.460
That's where the breakdowns start to happen with the with the uh middle managers.
00:19:32.619 --> 00:19:37.420
And then it goes down to the to the people that actually do the work, the value added.
00:19:37.819 --> 00:19:45.420
And and and we wonder why things why things uh don't don't work the way they're supposed to.
00:19:45.579 --> 00:19:49.420
Why at the end of the year our we didn't meet our goals.
00:19:49.579 --> 00:19:52.139
Well, we didn't meet our goals because we didn't work as a team.
00:19:52.539 --> 00:19:58.779
Traditional management lies on local metrics where lean exposes this the system performance.
00:19:58.940 --> 00:20:03.420
In a vertical structure, like you mentioned, leaders optimize their sty their silo.
00:20:03.899 --> 00:20:08.859
Often they expose at the expense of the overall value at the overall value stream.
00:20:09.099 --> 00:20:15.259
Lean connects processes into in, making system level waste and constraints visible.
00:20:15.500 --> 00:20:22.139
Lean leadership requires embracing visibility and letting go of false control.
00:20:22.539 --> 00:20:28.460
Reduce inventory, like you mentioned, because it ref it removes the buffer that hides all the problems.
00:20:28.700 --> 00:20:36.299
Lean leadership from controlling outcomes to improving processes through the PDCA and development of people.
00:20:36.539 --> 00:20:42.139
How do leaders manage that tension between comfort and transparency, George?
00:20:42.460 --> 00:20:44.859
Yeah, well, pretty poorly today.
00:20:45.099 --> 00:20:55.819
What we've got is a lack of transitional strategy going from a vertical organization to a horizontal organization.
00:20:56.059 --> 00:21:07.980
We don't think about how tough it is that this particular leader has been doing this job for 20, 30 years, and now all of a sudden, you know, they've gamed the system for 30 years.
00:21:08.220 --> 00:21:16.220
Now all of a sudden, they're being asked to expose problems that they really never wanted to expose in the past.
00:21:16.460 --> 00:21:17.980
It's impossible for them.
00:21:18.139 --> 00:21:19.500
So you gotta go slow.
00:21:19.579 --> 00:21:32.059
You gotta teach them that problems are treasures, and exposing a problem is what you got to give them a pat on the back for versus going out and going after them.
00:21:32.220 --> 00:21:42.619
It's a real dynamic that that I really think leaders won't get until somebody at the top of the organization says, look, we're gonna change.
00:21:42.859 --> 00:21:45.420
And that means I need to change as a leader.
00:21:45.579 --> 00:21:53.339
So the leader must be calm, structured, problem-solving approach, and they have to have that.
00:21:53.740 --> 00:22:01.899
And you know, instead of asking who missed the target, we ask what condition in the process allowed this to happen.
00:22:02.059 --> 00:22:10.779
Instead of focusing on the person to blame, we're focusing on the process that's to blame and the standard that we currently have.
00:22:11.180 --> 00:22:14.859
So this is a profound shift, doesn't happen easily.
00:22:15.019 --> 00:22:20.299
Many times you need you need that facilitator to do do it, help you with it.
00:22:20.460 --> 00:22:22.379
That's what Tom and I do for a living.
00:22:22.539 --> 00:22:24.059
So this is this is a problem.
00:22:24.220 --> 00:22:31.259
So that's how leaders move from managing numbers to developing people, and that's how sustainable excellence is created.
00:22:31.500 --> 00:22:32.059
Absolutely.
00:22:32.700 --> 00:22:39.980
Okay, so before we move to our coaching questions, I want to personally invite all the coaches listening today to pop in.
00:22:40.139 --> 00:22:42.059
And we're gonna we're gonna start slow.
00:22:42.220 --> 00:22:44.139
And this requires reflection.
00:22:44.299 --> 00:22:48.779
You know, something we discussed might have raised some interest in our coaches.
00:22:48.940 --> 00:22:51.740
So before we start, Kyle, any thoughts?
00:22:51.899 --> 00:22:53.339
And Jose, any thoughts?
00:22:53.659 --> 00:23:00.059
I guess one of the things that Tom had mentioned was the uncomfortable shift from vertical to horizontal kind of culture.
00:23:00.299 --> 00:23:06.539
And I remember when we went through that about five years ago or so, we lost about half of our staff.
00:23:06.700 --> 00:23:15.899
I'd like to believe that it's just they weren't the right cultural fit for the kind of place where they're expected to perform and continue to grow and challenged all the time.
00:23:16.139 --> 00:23:19.420
Maybe they just weren't meant to be in a company like that.
00:23:19.579 --> 00:23:28.940
But I'm curious if there's other things that you've seen in that shift in other companies that they avoided losing any people or other problems they might have encountered.
00:23:29.259 --> 00:23:31.259
You know, Kyle, that's that's really good.
00:23:31.500 --> 00:23:35.339
That's that's really what Jim Collins said in Good to Great, right?
00:23:35.500 --> 00:23:43.099
It's every person, every person has a seat on the bus, but you don't put them in that seat just because.
00:23:43.339 --> 00:23:47.420
And if they can't handle it, well, they're gonna have to get off the bus, right?
00:23:47.899 --> 00:23:49.339
Or move to another seat.
00:23:49.659 --> 00:23:52.299
Or move to a seat where that they can do.
00:23:52.779 --> 00:23:53.420
Yeah.
00:23:53.659 --> 00:23:56.779
And you know, that's not comfortable for people.
00:23:56.940 --> 00:24:03.500
What happens is we promote people because they're good people, we like them, but then we don't train them.
00:24:03.659 --> 00:24:07.819
We just say, hey, I like this guy, so I'm gonna get I'm gonna make him this position.
00:24:07.899 --> 00:24:09.579
He gets a raise, great.
00:24:09.819 --> 00:24:11.019
Everybody's happy.
00:24:11.180 --> 00:24:12.220
No, they're not.
00:24:12.700 --> 00:24:13.980
Because people talk.
00:24:14.220 --> 00:24:15.180
Everybody talks.
00:24:15.259 --> 00:24:23.099
They're all of the people that are his subordinates are gonna say, yeah, the only reason this guy has a job is because you know he's friends with the boss.
00:24:23.420 --> 00:24:38.779
That made me think of maybe one of the symptoms that we had back then was we'd have the owner that would come in and and and save the day all the time, fix any problem, no matter what, however, anyone was performing, it was okay.
00:24:38.940 --> 00:24:41.099
Let me come in and try to help make it better.
00:24:41.339 --> 00:24:43.579
No one was held accountable for anything.
00:24:43.819 --> 00:24:46.460
Uh, it didn't mean that they would get fired if they made a mistake.
00:24:46.539 --> 00:25:09.339
It was like if anything went wrong, it's like that's okay, we'll just I'll figure it out, or someone else will take it over instead of realizing that when people could be held accountable, it means we expect you to acknowledge the the thing that went wrong and come up with an idea of something you'd want to try differently, and that's holding you accountable to doing something, right?
00:25:09.579 --> 00:25:12.619
Where that wasn't the way it was before in our company, right?
00:25:12.700 --> 00:25:13.659
So Yeah.
00:25:13.980 --> 00:25:17.740
You know what, to to your credit, Kyle, you're you're a great leader that way.
00:25:17.980 --> 00:25:18.299
Okay.
00:25:18.940 --> 00:25:29.980
So, you know, sometimes you gotta go slow to go fast, and that's just the way that's just the way it is when you're building capability in an organization.
00:25:30.539 --> 00:25:32.859
Okay, Tom, I think you got the first question.
00:25:33.019 --> 00:25:33.659
Go ahead.
00:25:34.059 --> 00:25:34.619
Yeah.
00:25:34.859 --> 00:25:43.019
So, first question is what's the true delivery mechanism in your organization, and how clearly do your people understand it?
00:25:43.339 --> 00:25:56.139
Okay, so in our organization, the true delivery mechanism is our end-to-end-to-end customer fulfillment process from initial inquiry through design, production, and delivery.
00:25:56.859 --> 00:26:01.019
The entire chain of activity is what actually delivers value.
00:26:01.259 --> 00:26:04.940
However, most of our people don't think in those terms.
00:26:05.099 --> 00:26:10.379
They see the reparament as the delivery mechanism because they work by themselves.
00:26:11.579 --> 00:26:19.180
Engineering believes in its design, operation believes production is it, sales believes is closing deals.
00:26:19.500 --> 00:26:23.339
So they working vertically, right?
00:26:23.659 --> 00:26:27.819
Because we are not consistently thinking in terms of the full process.
00:26:28.059 --> 00:26:32.059
We don't see the voice of the customer or what the customer needs.
00:26:32.139 --> 00:26:36.059
I'm just focusing on what I need to do, I just follow orders.
00:26:36.139 --> 00:26:38.299
This is what I have to do, that's what I deliver.
00:26:38.539 --> 00:26:40.139
Alignment sometimes breaks down.
00:26:40.619 --> 00:26:48.700
If we made the entire value stream visible and talk about it regularly, I believe understanding will improve significantly.
00:26:49.019 --> 00:26:50.299
Yeah, very, very good.
00:26:50.700 --> 00:26:53.659
So, Kyle, how would you describe your organization?
00:26:53.740 --> 00:26:56.220
And I think this goes to all of our listeners.
00:26:56.539 --> 00:26:58.700
If you had the homework, this is it.
00:26:58.859 --> 00:27:06.460
How would you describe your organization as primarily, would you describe it as primarily vertical or horizontal?
00:27:06.700 --> 00:27:09.259
And what evidence do you have that that's the case?
00:27:09.579 --> 00:27:16.139
Well, I would say, like, as I just mentioned earlier, like five years ago and before that, I would say it was very vertical.
00:27:16.379 --> 00:27:24.220
It was every department or discipline was looked at as its own individual delivery system.
00:27:24.539 --> 00:27:29.259
It was judged on how well it did in its own way in isolation.
00:27:29.500 --> 00:27:45.659
I believe that we ended up transitioning away from that and developed a system that's way more focused on customer value, overall metrics related to the inputs and the outputs that have nothing to do with one person delivering a specific task.
00:27:45.819 --> 00:27:56.619
Um there's a book that I would I'm just reading right now, and they have the example for a hospital that had like the worst patient customer rating in all of the country.
00:27:56.940 --> 00:28:02.220
And they when they talked about everyone that worked in the hospital, the doctors were the caregivers.
00:28:02.779 --> 00:28:05.980
And everyone else was an orderly or a nurse or whatever.
00:28:06.220 --> 00:28:15.420
But the new CEO that came into that hospital said they made badges for all 40,000 of their employees that said caregiver.
00:28:15.740 --> 00:28:16.859
And they were all caregivers.
00:28:17.180 --> 00:28:27.980
Whether you're getting the bandages for the doctor or whatever you're doing, you are helping, you are a caregiver and doing something that another person couldn't do their job if you weren't doing your job.
00:28:28.139 --> 00:28:44.299
And everyone saw themselves as caregivers and transitioned that entire Hopsable hospital into being the number one ranked in the country because everyone had that holistic view of that purpose and and not being an individual with a specific different deliverable.
00:28:44.539 --> 00:28:49.659
If that does that relate to the question, oh yeah, but the that's that's clarity.
00:28:49.819 --> 00:28:50.539
Clarity.
00:28:50.700 --> 00:28:57.259
I mean, everybody is there to service the patient, and that's a patient first strategy.
00:28:57.500 --> 00:28:58.379
Can you imagine?
00:28:58.460 --> 00:29:05.659
And and that is horizontal because every process delivers value, and they're connected processes.
00:29:05.740 --> 00:29:14.220
It's amazing when you lay out the clarity like that, like we're all in it for the customer, we're all there for the customer.
00:29:14.299 --> 00:29:18.379
It's not the doctor only, and everybody else services the doctor.
00:29:18.619 --> 00:29:22.299
Changed it and turned it upside down where they put the customer first.
00:29:22.539 --> 00:29:23.339
Makes a lot of sense.
00:29:23.500 --> 00:29:23.899
Good answer.
00:29:28.220 --> 00:29:31.740
In my company before, and George, you would remember this.
00:29:31.980 --> 00:29:36.220
We used to have this program that was our CAP program, CAP.
00:29:36.299 --> 00:29:38.059
It was our change adoption program.
00:29:38.220 --> 00:29:51.819
And we had this nice little online form you'd fill out with seven fields, you'd submit it, and then we'd have executive meetings every week that we'd review what's submitted and choose which ones to approve for opportunities for continuous improvement.
00:29:52.059 --> 00:29:59.819
What ended up happening is I think we have a had a backlog of about 60 of these forms that were submitted that we hadn't made a decision on yet.
00:30:00.139 --> 00:30:17.099
George introduced us to the MOSI, the MyOne Small Improvement Forum, and we ditched everything that we had, adopted that, where everyone now had the authority to identify any opportunity to improve or any problem, try something, fill out the third part that says, what happened, right?
00:30:17.339 --> 00:30:20.859
And we just put that up on a digital board that everyone had access to.
00:30:20.940 --> 00:30:27.899
And then every week, if there's any Moseys on there, we have a chance to review and highlight and discuss any improvement that was attempted, right?
00:30:27.980 --> 00:30:36.619
And it reduced it to a zero backlog of improvements and 60 improvements being made instead of a backlog in that same amount of time.
00:30:36.859 --> 00:30:50.059
So I think we now have evidence of a lot of examples of things that make our company horizontal today, where we have those annual, quarterly, monthly reviews of our 64 chart from Harada.
00:30:50.539 --> 00:30:55.099
And we pull from that in what our top three priorities are every day.
00:30:55.339 --> 00:31:22.059
We use our daily diaries, we use our routine builders, um, we have weekly review of gratitude board and and the aha board, and we have this system now of these routines or these pulses that all of these activities and tools that we've learned, mostly through George, we've now baked them into the way we do things, our system, or all these things that become, if someone joins in, this is just the way it's done.
00:31:22.220 --> 00:31:38.700
And when we review our every day, every week we update a 13-week scorecard that has all the metrics that matter to the company overall, relates to customer value, customer engagement, it relates to the improvements that are made, the changes in the rates of how things are changing.
00:31:38.859 --> 00:31:40.779
And those are company-wide things.
00:31:40.859 --> 00:31:43.740
It's not discipline related or department related.
00:31:43.899 --> 00:31:47.259
And everyone's involved in updating those and reviewing those every week.
00:31:47.420 --> 00:31:50.220
So we all have a sense of what's going on for the company overall.
00:31:50.299 --> 00:31:57.980
And there's probably a dozen more of those tools that we have baked into, whether it's daily, weekly, every two to three weeks, every month, every quarter.
00:31:58.139 --> 00:32:07.500
That it's just all those things keep us all aligned and all contributing without any one person having to come in and do something because everyone has the authority to do it now.
00:32:07.819 --> 00:32:08.220
Very good.
00:32:08.299 --> 00:32:12.299
So, Kyle, that's working to that's working together to service the customers.
00:32:12.379 --> 00:32:13.180
So, way to go.
00:32:13.339 --> 00:32:14.859
Tom, you got the next one.
00:32:15.099 --> 00:32:15.659
Yeah.
00:32:15.899 --> 00:32:20.139
So, Jose, where in your organization is the inventory hiding problems?
00:32:20.299 --> 00:32:25.980
It can be physical or informational, but where's it hiding your problems?
00:32:26.299 --> 00:32:33.339
Yes, in our organization, we definitely have lots of inventory, physically and information.
00:32:34.460 --> 00:32:40.460
On the physical side, you know, we carry excess working process uh between production steps.
00:32:40.619 --> 00:32:48.539
We have large amounts of raw inventory, in-process inventory, just to make sure that the next step they have work.
00:32:49.180 --> 00:32:59.259
But instead of you know working against this, we don't see the problem, the real problems like quality problems, like uh the design problems.
00:32:59.420 --> 00:33:05.980
We don't see those problems because they are hidden because the operation, the next operation that has always something to do.
00:33:06.379 --> 00:33:09.339
So we have a huge amount of inventory.
00:33:09.500 --> 00:33:22.059
On the informational side, we have a large backlog of emails, reports, and approvals, cues that create a big buffer where miscommunication and unclear expectations sit without being addressed.
00:33:22.220 --> 00:33:29.819
You know, that could that create delays for the customer, you know, delays on paperwork, even for the shipping department.
00:33:29.899 --> 00:33:39.899
They cannot ship because they haven't received the full information, because credit didn't approve, because credit is waiting for some approvals from some signatures or you name it.
00:33:40.059 --> 00:33:47.740
So it's not only the physical inventory, but also the transactional inventory, which can also huge inventory can create big delays.
00:33:47.980 --> 00:34:04.539
If we definitely reduce those buffers, I believe many issues will surface quickly, and that will force us to resolve it by going analyzing the root causes instead of managing around these problems, these hidden problems.
00:34:04.859 --> 00:34:09.099
Yeah, so the bigger the company, it seems like the bigger the problems.
00:34:09.340 --> 00:34:14.619
Jose, how large a company do you have, and what are you responsible for?
00:34:14.700 --> 00:34:18.780
So our listeners can get an idea of what you do.
00:34:19.500 --> 00:34:23.500
So the company overall is about 22,000 employees.
00:34:23.740 --> 00:34:38.460
The business unit I am I work working is has about uh 8,000 employees, and I am in charge of the leading the continuous improvement initiatives for seven production plants in the United States.
00:34:38.780 --> 00:34:46.139
Yeah, so it's difficult when it grows and people get comfortable, it's hard to break through those vertical silos.
00:34:46.300 --> 00:34:48.619
Okay, my next question is for Kyle.
00:34:48.860 --> 00:34:58.300
When problems surface, Kyle, do your leaders respond by controlling through the numbers or by coaching through problem solving?
00:34:58.460 --> 00:35:02.619
And I'm gonna add, at the gimba, do they go and understand?
00:35:02.699 --> 00:35:07.739
Yeah, I don't think coaching through problem solving makes any sense unless it's at the Gemba.
00:35:07.900 --> 00:35:15.019
There was something that I heard is like, let the plant, let the Gemba be your teacher.
00:35:15.179 --> 00:35:16.619
And I think people forget that.
00:35:16.779 --> 00:35:17.900
Go ahead, Kyle.
00:35:18.219 --> 00:35:25.019
Well, yeah, and for my company's Gemba is not a physical plant doing manufacturing, right?
00:35:25.179 --> 00:35:32.860
We might have an app or we would have a process documented on Miro board or we'd have collateral as a PDF.
00:35:33.019 --> 00:35:35.099
So a lot of our things are touch points.
00:35:35.259 --> 00:35:38.779
They're not necessarily a manufacturing facility.
00:35:39.019 --> 00:35:49.019
So if something goes wrong and there's an opportunity or something goes off of not expected, we again go to our tools that we have baked into our system.
00:35:49.179 --> 00:35:54.779
So if something goes wrong, the person that encountered it may just fill out a Mosey and try something else.
00:35:55.019 --> 00:36:00.059
We have in-the-moment coaching and we have weekly coaching sessions that are scheduled.
00:36:00.300 --> 00:36:03.500
So if anything goes wrong in the week, we hey, how'd the week go?
00:36:03.579 --> 00:36:05.579
It's like, oh yeah, something went wrong.
00:36:05.659 --> 00:36:06.860
It's like, well, let's look at it.
00:36:07.019 --> 00:36:08.219
Like, let's talk about it.
00:36:08.300 --> 00:36:15.099
And and then maybe from there they have enough from the talk and to say, okay, I'm gonna try a Mosey and we'll review next week how that goes.
00:36:15.340 --> 00:36:18.779
So I and again, before we never had any coaching, right?
00:36:18.860 --> 00:36:21.099
It was all you have a problem, I'll fix it.
00:36:21.259 --> 00:36:21.420
Right.
00:36:21.659 --> 00:36:41.500
So now it's more of the uh let's look at what the situation is and and try to relive it if we can, if it's possible, in that scenario, uh recreate it, and then talk about it and make them feel like they have the ability to come up with ideas to solve it, and I don't give them answers anymore uh to try to help them develop that skill.
00:36:41.739 --> 00:36:47.980
Yeah, you know, Kyle, I'm I'm thinking about something and I think it's a little profound, right?
00:36:48.219 --> 00:36:53.900
This is where I would write it down and uh you know, log it somewhere and put it in my next book.
00:36:54.139 --> 00:36:56.539
We don't need a learning organization.
00:36:56.779 --> 00:36:57.340
We don't.
00:36:57.500 --> 00:36:59.340
This is what everybody's going after.
00:36:59.500 --> 00:37:00.619
That's the result.
00:37:01.099 --> 00:37:05.659
We need a great coaching organization like the one you're providing.
00:37:05.820 --> 00:37:07.019
So way to go co.
00:37:07.420 --> 00:37:11.259
Well, and by coaching, people are learning.
00:37:11.500 --> 00:37:14.300
So yeah, that's that's you're absolutely right.
00:37:14.619 --> 00:37:16.380
The coaching is what what matters.
00:37:16.699 --> 00:37:19.900
And maybe the learning is the output and the coaching is the input.
00:37:20.460 --> 00:37:25.900
Yeah, the input is is coaching, the output is is learning from the gimbal, like George said.
00:37:26.139 --> 00:37:28.139
Jose, next question is for you.
00:37:28.300 --> 00:37:34.860
How are you prioritizing your problems and are they aligned with your long-term vision and annual objectives?
00:37:35.099 --> 00:37:49.019
Yeah, well, right now many of our priorities are reactive, and when I say reactive, it's because the biggest problem who pop up today is what we attack, and this is what everybody goes to.
00:37:49.099 --> 00:37:54.059
You know, this is like a firefighting game, because every day we have firefighters.
00:37:54.300 --> 00:38:01.820
We have an annual goal, but the connection, we have some gap in this connection, and that our daily problem solving isn't always clear.
00:38:01.980 --> 00:38:08.059
Uh, not every improvement effort uh ties directly to our long-term vision.
00:38:08.219 --> 00:38:29.019
And and this is because we don't have clear expectations, you know, like if if if we work like on safety, quality, delivery, cost, and teams, and people they're just firefighting issues, they're just going through the day instead of focusing on how can we improve quality, how can I improve delivery, how can I improve cost.
00:38:29.259 --> 00:38:42.460
I'm just firefighting because I have all uncertainty and I I I don't have the process, established process to attack those problems or prioritize these problems.
00:38:42.699 --> 00:38:55.659
To improve, we need clear organization processes, something like aligning improvement work with the strategic objectives so teams understand why certain problems are more important than others.
00:38:55.820 --> 00:39:11.739
If we're sure that we're gonna be delivering more effective, reducing our cost, or you know, resolving quality issues is where we should be, you know, that's the priority, that's the alignment we need to have across the network, across the organization, and the different departments.
00:39:11.980 --> 00:39:17.739
This alignment, alignment will help us to ensure we are not just solving problems, but solving the right problems.
00:39:18.059 --> 00:39:18.779
That's very good.
00:39:18.940 --> 00:39:30.860
And you know, so we're talking when we talk about processes, and in a lot of cases you see where somebody, hey, if I can hide this problem, I'm gonna keep, I'm gonna hide it.
00:39:30.940 --> 00:39:34.139
I'm not gonna, I'm not gonna correct it, I'm just gonna hide it, right?
00:39:34.380 --> 00:39:40.139
George, if you remember, we ran into a a large contractor while we were in Santorini.
00:39:40.300 --> 00:40:10.539
He was a Japanese contractor, and he put up walls, and he would, you know, for for buildings, for you know, large buildings, and he his people on his processes, if something was off on these walls, like on their, they would they would stop and make sure that it was corrected, even though nobody'd ever see it, and it would probably never be found.
00:40:10.699 --> 00:40:19.820
He just had that in his mind on hey, if I let this go and I and the process breaks, it's going to continue to go, right?
00:40:19.980 --> 00:40:21.179
And that's what happens.
00:40:21.340 --> 00:40:26.619
We continually let our processes slide, and we say, that's okay, that's okay.
00:40:26.779 --> 00:40:31.340
We've got it, it you have to make sure your processes re are are followed.
00:40:31.579 --> 00:40:32.139
That's awesome.
00:40:32.300 --> 00:40:33.099
Thank you, Tom.
00:40:33.500 --> 00:40:37.579
That is our session on integrated lean systems.
00:40:37.659 --> 00:40:42.619
And remember, process is the delivery mechanism for value.
00:40:42.779 --> 00:40:44.300
You've got lots to think about.
00:40:44.460 --> 00:40:45.739
Think about your organization.
00:40:45.900 --> 00:40:49.820
Is it a vertical or a horizontal company?
00:40:50.219 --> 00:40:58.940
And if it's vertical, try to get out of that now because you know if it's vertical, you are holding on to way too much inventory.
00:40:59.179 --> 00:41:00.940
Think about a transition plan.
00:41:01.179 --> 00:41:07.659
Give us a call, come join us, talk to us a little bit about your vertical organization for next time.
00:41:07.820 --> 00:41:10.539
This is George Richillis with my partner.
00:41:11.659 --> 00:41:14.539
Yeah, great, and thank you, Kyle, and thank you, Jose.
