Category: Law #2

The Art Of Replacing Systems: How To Change The World

Tuesday, January 14th, 2014

“Business and human endeavors are systems…we tend to focus on snapshots of isolated parts of the system, and wonder why our deepest problems never get solved.” – Peter Senge

Senge had it right. I have never, EVER seen a systemic issue truly resolved with an isolated, tactical solution. Every year, for example, automakers spend millions of dollars on dealership personnel training. Yet nothing really changes. The U.S. dealership culture is one of the strongest cultures on the planet, and one of the most generally negative, for a simple reason: the financial incentive of an inventory push system paired with a virtually immutable dealer franchise system makes for at once an unstoppable force and immovable object.

But when you replace the prevailing system with a better one, you change the world. At the risk of being repetitive, allow me to retell one of my favorite stories.

First, imagine the worst place you’ve ever worked. The darkest, most depressing, soul-sucking work environment you’ve ever had the misfortune to inhabit.

Got it in your mind’s eye? Now, multiply it by oh, say, 100. That’s how bad the place I’m about to describe was. I know, because I spoke to people who were there.

The year was 1982. It was the year of Jordaache Jeans. The year of Wendy’s “Where The Beef?” commercial. And the It was 1982, the first full year of Reaganomics.

The place was the General Motors Fremont, California plant (now the Tesla factory).

Trade friction was developing between the U.S. and Japan over the volume of import cars. American industry wasn’t exactly booming. Gas prices were high. Economy cars were in demand. A large dent in the U.S. domestic automobile market had been made by fuel efficient compact cars imported from Japan and Europe. Detroit’s Big 3 had pleaded with Washington, D.C. to do something to protect the U.S. GDP.

Meanwhile, the Fremont plant was in a death spiral. Of the 30-odd GM factories, it was by far the worst, in every conceivable way.

There was 20% absenteeism…on any given day, a fifth of the workforce wouldn’t show up on any given shift, requiring the hiring of that many more workers. Labor conditions were militant, toxic, even violent, with multiple wildcat strikes and sickouts by the United Auto Workers. There were 5000 union grievances on file, which was significant, because only 3000 people worked there. Rampant drug and alcohol abuse required special cleaning crews to clear the liquor bottles and drug paraphernalia from the employee lot after shift change. Rumor had it that to stay inebriated on the job, workers placed coolers of beer and other beverages  in the cars as they rolled down the line. Prostitution was available from RVs parked nearby. There were four murders one year, all drug-related.

The plant was barely operational in terms of quality and productivity: double-digit defects in every car, with average hours to assemble a vehicle nearly double that of any other GM plant. Lack of employee pride and confidence was evidenced by the fact that not a single Fremont-built car could be found in the employee parking lot.

Organizationally, there were over 100 job descriptions, with some fourteen levels of supervision. In other words, nothing, including information, flowed freely.

You can’t keep the lights on with conditions like that, so in February of that year, GM closed the factory and laid the entire workforce off.

There’s not much you can do with such a horribly bad place, except shutter it. Or is there?

Enter Toyota, looking to ease trade tensions and test its production system and management approach on U.S. soil with American unions and suppliers. They (along with other Asian and European automakers) knew they had to begin building plants in the States or face a cap on their growth and profitability.

But building a factory is a huge risk. Forget the millions of dollars years of time required to buy land, build a plant, and make it operational. You had to deal with the United Auto Workers union. Unions didn’t exist in Japan.

So what did Toyota do? They cast about for a joint partner. They approached Ford first, to no avail. Then they approached GM with a proposition: reopen the Fremont plant.

Which is nuts if you think about it. Toyota itself was split, the primary concern being giving away production methods and quality processes to a direct competitor.

Then-Chairman (the late) Eiji Toyoda saw it as the perfect challenge, the perfect test, and the perfect opportunity to prove the viability and transportability of the Toyota Production System. It was the chance to see whether people of different cultures with different philosophies and attitudes could adapt to the Toyota system and structure. It was the necessary first step leading to wholly owned Toyota manufacturing in North America.

The partnership formed in 1983, and the plant was to be named New United Motor Manufacturing Inc., NUMMI for short.

The deal was crazy, at least for Toyota, and had everything going against it: Toyota would inject cash, manage the plant, and implement the Toyota Production System. For GM, though, the deal was heaven-sent: a rebadged Toyota Corolla and Chevrolet Prizm were to be the products. They’d get their plant open and running without spending a dime, and get insight into a market-leading economy car. Win-win, for GM. For Toyota? Questionable at best.

And then, the hiccup. A big burp, really. The UAW raised its powerful hand and declared that it didn’t much matter what the factory was called, it was a UAW plant. The new entity had to use the same workers, the same union, the same facilities and even almost all of the equipment.

Remember, these were the same folks getting drunk on the job.

It was nearly a deal-breaker. At the end of the day, though, it was the cheapest and most risk-averse experiment Toyota could run. They took a “if we can make it there, we can make it work anywhere” approach, and took the highest road possible.

They hired back 85% of the Fremont hourly union workforce, with an eye toward weeding out that bad 20% or so that had essentially checked out. Non-union supervisors and managers were broomed.

Two simple rules provided a new social context: First, the  goal was not simply doing a job, but rather improving the work. Second, no one would be laid off.

UAW’s hundred-plus line job descriptions were replaced by one: team member. Supervisory positions were carved from hourly personnel, effectively flattening the company from fourteen levels to two: team leader and group leader. Toyota spent over $3 million to send 450 new group and team leaders to Toyota City for training in the Toyota Production System.

1984 was spent installing a new system and ramping up operations. Team members were trained the group and team leaders in the problem solving and kaizen practices (that they had learned in Japan) to become the experts in their respective operations.

Wonder of wonders, employees at all levels began engaging. Ideas for improvement were quickly implemented by team members, with successful solutions becoming standardized. All associates were empowered to stop the line at any time to fix a problem by pulling a cord running around the entire facility. Cooperation and confidence replaced coercion and conflict.

Full production began in 1985, and by year-end 1986, NUMMI had the highest quality and productivity of any GM plant.

Quality defects dropped from 12 to 1 per vehicle. Cars were assembled in half the time. Absenteeism dropped to 3%. Worker satisfaction and engagement soared. Grievances evaporated, replaced by nearly 10,000 ideas implemented the first year.

Pride returned to work, and team members would drop their business cards on windshields of NUMMI-built cars they spotted in Bay area parking lots.

Same people, same union, same equipment. Radically different outcome. All in under two years.

By 1988, NUMMI was an award-winning plant. By 1990, the Toyota Production System was being heralded as the world-class standard for manufacturing operations.

By all accounts, the change was transformational.

Take home lesson: change the system, change the structure, change the social context. Then watch the culture of innovation flourish.

A team leader at NUMMI who there before and after the Toyota transformation, told me this:

“Never in a million years would I tell you factory work is creative. Then Toyota takes over. They teach us their system then say to us, ‘we want you to tell us how to make it better.’ We went from ‘just do your job’ with GM to ‘no one knows the job better than you’ with Toyota. They teach us how to solve problems. They turn us loose in here! They say, call for help if something’s wrong, stop the line anytime if you have to. I was floored. They think I can make their systems better? They’re giving me the power to stop production? That right there changed my life.”

The NUMMI experiment woke up the world to better way to build cars. James Womack and Daniel Jones wrote about the Toyota Production System in their landmark book, The Machine That Changed The World.

Got what you think is a disruptive innovation? Then make sure you’ve thought through the three governing dimensions that house your solution:

1. Solid structure—policies, procedures, physical environment.

2. Strong systems—input, output, processes, patterns.

3. Social significance—purpose, principles, people.

These elements give meaning to an innovation by providing the lens of context through which the solution can be viewed. People crave meaning, because it helps them make sense of the world.

Great innovation looks deep into each dimension. Words like structure, systems and significance shouldn’t frighten anyone. Systems thinking isn’t about IQ. Just the opposite. It’s about delivering something intuitive.

It’s about being street smart.

Mastering The Meeting

Monday, June 3rd, 2013

(This article originally appeared on 99U. Illustration by Oscar Ramos Orozco.)

Meetings are often the bane of many a creative’s existence, especially those working for a big outfit. “Death by meeting” is a common complaint, the lament usually being one of frequency, length, or lack of productivity. Despite the many books written on the subject, meetings remain a sore spot for many. There may be a practical solution.

Introducing the “Lean” Meeting

One of the most interesting things I observed over the eight years I spent as a creative advisor to Toyota was how a team of designers or engineers working on the same project might hold several short meetings over the course of the day—sometimes as many a five different times. The interesting aspects were three-fold:

  1. The meetings were not necessarily scheduled. They were held as needed, on a just-in-time basis. Further, they weren’t anchored by any scheduling software timeblocks. In other words, they weren’t slave to some multiple of 15 minutes. They might be 7 minutes, or 22 minutes. I saw one meeting last barely over a minute.
  2. Little discussion occurred. The meetings were held for a single purpose: to make a key decision.
  3. The meetings were in essence a formality. I learned that the Toyota project teams held a completely opposite view of the “meet and confer” philosophy held by most organizations. The “confer” part was held outside the meeting, conducted by individuals in one-on-one dialogs, so that by the time the meeting was held, all team input had been gathered and an informal consensus had been achieved.

Born in the factories of Toyota, “lean” was the term coined the 1996 book Lean Thinking and recently re-popularized by the 2011 book The Lean Startup. A lean practitioner looks at the world of work as being one of two things: value-adding, or non value-adding. The ultimate goal of becoming lean is to add value by eliminating everything that doesn’t.

While some of the success can be contributed to Toyota’s overall mindset of keeping things lean, the good news is that you don’t have to be Toyota to dramatically improve the results of your meetings in much the same fashion.

The critical starting point is to think of meetings as you would any other process: to be considered lean, a meeting must be characterized by minimal, and preferably absent, non value-adding work.

The 3 M’s

The words muri, mura, and muda in Japanese hold a special place in the heart of a well-trained lean practitioner. They are the brainchild of Taiichi Ohno, the founding engineer of the vaunted Toyota Production System.

  • Muri means overload, and is described as stress, strain, or undercapacity.
  • Mura means inconsistency, and can take the form of irregularity, imbalance, or interruption.
  • Muda means waste, and comes in seven basic flavors: overproduction, overprocessing, waiting, unnecessary motion, transportation, defects, and inventory.

Although most meetings are fraught with all three, muda is the easiest of the three to target because it is generally more visible. In fact, most people view meetings as a complete waste, as they so often steal precious time and productivity without adding anything remotely resembling real value.

Take a forensic look at your last meeting and ask yourself a few questions:

Did it add value for everyone, or was it mostly arm-waving (i.e.overproduction)?

Was there a – focus on a critical issue, or did we simply brush the surface of too many subjects (i.e. overprocessing)?

Did we start and stop precisely on time, or were we waiting?

These are just a start, but if the answers to those questions reveal three negative answers, it’s time to make your meetings lean. Start with a simple three-point strategy:

1. Limit yourself to keep it under 12 minutes.

Part of what constitutes any lean operation is the absence of “batch and queue,” meaning piling and lining up. A Toyota process is characterized by small lots, often a single piece, and high frequency…conducted in a just-in-time fashion.

You can employ the same strategy. Keep your meetings short, but higher frequency. Commit to meetings under 12 minutes, and use your calendar software to help you avoid the 15-, 30- and 6-minute timeblock default. That forces you to simplify the purpose of the meeting.

2. Only have meetings around a single purpose or goal.

Commit to using meetings for the singular purpose of making a decision. That forces you to employ the third strategy:

3. Unsocial meetings.

At Toyota, the principle of nemawashi is used to gain consensus on ideas and plans. The term comes from the art of bonsai, and means “preparing the roots for planting.” In other words, socialize your content before the meeting using quick huddles, office fly-bys, one-on-one conversations. Gain input and consensus outside the meeting context, so that the whole notion of “next steps” is limited to being decisive in meetings.

How about you?

What methods have you tried to make meetings more efficient?

Forge Your Front Line, Liberate Your Leaders

Wednesday, April 10th, 2013

What if you were able to grow your business confidently in the direction of your choosing? What if you could consistently provide the most innovative solutions to your customers’ problems? What if you could attract your industry’s best talent?

What if you could command premium pricing of products and services that are heavily in demand and are far superior to any alternatives?

According to entrepreneur Ray Attiyah, author of The Fearless Front Line, there’s only one way to achieve the entirety of this wish list: liberate the leaders by empowering the front line.

Attiyah is the founder and Chief Innovation Officer of Definity Partners, a training, process and leadership improvement firm. In addition to founding Definity Partners, Attiyah owns 16 additional businesses including start-ups, manufacturer, training and e-commerce companies.

Buried in Daily Details

Attiyah argues that all too often the front-line activities of a business are so unpredictable, unreliable and complicated, that business owners and leaders can’t seem to pull themselves away. But if you’re spending most of your time on the day-to-day operational aspects of the business, you’ve left a critical gap.

“Time and energy are consumed by urgent but unimportant tasks,” he writes. “Who’s creating the innovative and inspiring visions and strategies that are critical to growth?”

The key is to liberate the top. But the precondition necessary to do that is “having a front line that can operate reliably, excellently, and independently day in and day out every day of every week of every year.”

Attiyah maintains that business owners often have difficulty forgetting bad situations, and that inability to let go shakes their confidence in their front-line team and its activities. To compensate for their lack of confidence in the front line, leaders become conditioned to over-manage and under-lead.

Attiyah describes how to embolden the front line to take true ownership of essential day-to-day operations, which will liberate owners from getting mired in the distracting details. They can then capitalize on the momentum created by the fearless front line to determine what the organization needs to do to make (then keep) bold promises, place (then win) bold bets, and scout (then hire) bold people.

The Key to Inspiring the Troops

So how does Attiyah suggest you develop this inspired, accountable and confident front line?

  1. Raise the bar of excellence by investing in top performers and removing obstacles that frustrate them
  2. Make meaningful changes quickly to bolster team confidence, enthusiasm and trust
  3. Implement daily huddles to foster a positive “what went well” environment, communicate your standards of performance and create a simple touch point for communicating the status of reactive improvements

Attiyah’s approach is based on a simple truth: As businesses mature, they create clutter. Superfluous processes are added to create a safety net for unreliable systems, and the organization can’t see clearly what it needs to do to be efficient and effective. Leaders end up spending most of their time in the weeds, which distracts them from their most important priority: growing their business.

Attiyah introduces a Run-Improve-Grow model, a continuously moving system that stimulates a culture of consistent relevancy, new growth and constant innovation. You can use the principles of Run-Improve-Grow to build a solid and simplified foundation.

The Run focuses on excellence and empowers the front line to take true ownership of their critical role.

Improve capitalizes on the momentum created by the fearless front line to liberate the organization’s leaders.

With a fearless front line, simplified management system and new organizational attitude, a business is ready to launch boldly into the Grow, outlining what the business needs to pursue strategic innovations and new opportunities that will propel the company to great relevancy and profitable growth.

“Imagine a workplace that is free from the stress of managers and staff always finding problems but rarely acting on solutions,” Attiyah writes. “A workplace where teams establish and agree on clear standards of excellence, and a workplace where people are encouraged to propose bold ideas and then make them realities? Run-Improve-Grow makes that workplace possible.”

If you want your front-line workers to have an “I run this place!” mindset that frees you up to concentrate on the bigger picture, The Fearless Front Line will provide a practical road map, and deserves a read.

Reprinted from my OPEN column.

Doubling Down on Less(ness)

Tuesday, January 8th, 2013

In 1969, the year in which he won the Nobel Prize in Literature, Irish dramatist Samuel Beckett (pictured above) published a short piece of experimental prose entitled Sans in French. He then rewrote the piece in English and called it Lessness. It begins this way:

Ruins true refuge long last towards which so many false time out of mind. All sides endlessness earth sky as one no sound no stir. Grey face two pale blue little body heart beating only up right. Blacked out fallen open four walls over backwards true refuge issueless.

Scattered ruins same grey as the sand ash grey true refuge. Four square all light sheer white blank planes all gone from mind. Never was but grey air timeless no sound figment the passing light. No sound no stir ash grey sky mirrored earth mirrored sky. Never but this changelessness dream the passing hour.

The seemingly chaotic nature of the narrative (you can read the whole thing HERE) actually has a great deal of order and symmetry to it, and my bet is that your brain is furiously trying to find the pattern and meaning in just these two short paragraphs. What makes Lessness so interesting (to me, anyway) is that Beckett used a few simple rules to randomly generate the sentences.

Beckett was actually quite precise in creating a sense of ambiguity. Yale University Library has on file a document in which Beckett offers a few keys to deciphering the meaning of Lessness. The whole piece is based on six “statement groups” of ten sentences each. These sixty sentences are presented twice, each time in a different order and paragraph structure. The paragraphs all have between three and seven sentences.

Without making his overall themes explicit, Beckett gave each of the six statement groups a particular thematic element and used a formal structure, some scholars believe, to convey the arbitrary way in which we structure time (60 minutes in an hour, 24 hours in a day, 7 days in a week, 12 months in a year, etc.).

Beckett told renowned theater scholar Ruby Cohn how he did it, and in her 1973 book Back to Beckett, she revealed the code:

He wrote his sixty different sentences in six families, each family arising from an image. Beckett wrote each of these sixty sentences on a separate piece of paper, mixed them all in a container, and then drew them out in random order twice. This became the order of the hundred twenty sentences in Sans.

Beckett then wrote the number 3 on four separate pieces of paper, the number 4 on six pieces of paper, the number 5 on four pieces, the number 6 on six pieces, and the number 7 on four pieces of paper. Again drawing randomly, he ordered the sentences into paragraphs, according to the number drawn, finally totalling one hundred twenty.

The important point is that, irrespective of whether or not Lessness is in fact random and chaotic, to the reader it appears to be so. It’s the absence of obvious symmetry and clear order that engages the reader. You cannot predict what comes next, and you cannot reduce the text to a succinct, simple message. Nonetheless, you keep trying to! The intrigue produced by a lack of apparent order engages your imagination.

Interesting, some mathematicians have determined that Beckett may have been telling readers not to attempt to reduce apparent chaos, but to accommodate it. They point to the fact that each half of Lessness contains 769 words, a prime number, irreducible to factors other than itself and the number 1.

In their paper Lessness—Randomness, Consciousness and Meaning, University of Dublin professors Elizabeth Drew and Mads Haahr wrote that “The absence of an obvious determinism guiding the flow provides a gap in understanding that spurs the reader’s interaction with the piece. The sense of patterning in the chaotic sequence of sentences entices the reader to untangle the random arrangement and attempt to piece together an elusive storyline.”

Exactly. That’s Law of Subtraction #3 (Limiting Information Engages the Imagination) par excellence. It’s also antifragility (thank you messr. Taleb) up close…Beckett’s piece gains from its disorder.

Why do I bring up Lessness? Because, after experimenting all last year with various titles for this blog, and contemplating no title at all, I’ve chosen Lessness for its ability to capture the essential nature of my focus…the ultimate outcome of intelligent subtraction. Hundreds of blogs are dedicated to creativity, innovation, and design, but few are published from the “less is best” perspective.

As I plow into what looks to be an exciting 2013, I’m doubling down on lessness. For my first act, I’ve reduced my OPEN Forum involvement to one article per month (most likely a book review or entrepreneur interview), down from four…all to make room for new endeavors with other outlets, and refocusing this blog.