Eight Questions I Get From My Students

Here are eight questions that my students ask me from time-to-time, along with my answers, which you may be interested in as well:

All your degrees are in engineering. How did you get into Lean management?

Dilbert cartoons frequently present a stereotype of engineers as those who seek facts, logic, and good decision-making, and are therefore in perpetual conflict with managers who are not concerned with facts, logic, and good decision-making. That’s me; I seek facts, logic, and good decision-making. When I worked in industry, I saw crazy things happening and thought there had to be a better way. I just didn’t know what it was until I participated in kaizen in the summer of 1994. Shingijutsu sensei taught me made so much sense. That’s was the beginning.

You are a somewhat controversial figure. What’s up with that?

Indeed. It’s because I say things that others will not say. It makes people uncomfortable, but it does get people to think and open up their minds. And that’s the point. I learned the importance of seeing reality from Shingijutsu sensei on day 1 of kaizen. The basic rule is that we cannot improve if we do not see reality. So I say things that simply reflect reality but which gets me in trouble every once in a while. But I think it is the right thing to do.

You seem to be something of an outsider?

That is true. I am not affiliated with any organization that promotes Lean. The strength of my work is that I have been free of any such conflicts of interest. This allows me to question things. If I were an insider, I would have to think like those on the inside, do things their way, and be forced to fall in line with Lean orthodoxy. The public benefits from someone like me who looks in from the outside. But the insiders don’t like it.

What is your objective? What are you trying to accomplish?

I am simply trying to help people better understand Lean leadership and Lean management, so that they can be more successful in their Lean efforts. I also want people to better understand Toyota-style kaizen, as that is what led Toyota to its production system and The Toyota Way. Organizations cannot learn to think like Toyota if they do not practice kaizen. Kaizen really is the key, yet it has been largely missing from Lean for nearly 30 years.

You write a lot. Why do you write so much?

It’s not to get rich. I write to think and learn, and then share my thinking and what I have learned with others so that they can hopefully benefit from it. There is more altruism in my work than most people imagine. That comes with being a professor.

Where do you get your ideas?

I get my ideas by listening to people and reading what others write, to learn what they do not understand about Lean. And I read a lot of diverse things and I think a lot about what I read for the purpose of identifying interesting associations and ways of presenting or explaining things that will hopefully help people better understand different facets of Lean.

What motivates you?

Human suffering. Employees, suppliers, and others suffer under chaotic conventional management (batch-and-queue material and information processing). Some leaders are just beginning to realize the human costs. The human costs are profound, given the many ways in which chronically stressful work environments can harm employees’ (and managers’) mental and physical health over time. Employees, suppliers, and others suffer under Fake Lean as well, and that’s why I’ve been advocating Real Lean – inclusion of the “Respect for People” principle in Lean practice – for over 20 years. Business leaders should not cause harm to human health and well-being. Work should be fun and people should be set up to succeed and know for certain that they are making meaningful contributions every day. It truly pains me to see the suffering caused by conventional management and by misunderstandings of Lean that lead to layoffs, not sharing financial gains with employees, and so on. My vision is that employees leave work physically and mentally healthier than when they arrived.

What prevents leaders from adopting Real Lean?

Classical and neo-classical economics seems to be the biggest of several different types of barriers that make it difficult for leaders to understand and practice Lean correctly (read my blog post, “How Economics Disrespects People”).

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Kaizen Evolution

It seems most people think kaizen is easy to know and do, when in fact it is challenging and of strategic importance to any business. Therefore, efforts should be made to master kaizen. Instead, people are overconfident and they make changes to kaizen without fully comprehending the effect that the changes will have on people or on the pace and magnitude of improvement.

Don’t bring kaizen down to people. Bring people up to kaizen.

Toyota’s kaizen method is often greatly reduced to a level that people will accept or to their current level of capability. The result is improvements that don’t make much of a difference in terms of the work or have little overall business impact. Yet, people will say: “We’re doing kaizen,” and management, not knowing any better, will agree.

Instead of lowering kaizen to people will accept or their current level of understanding, one should strive to raise people’s understanding of kaizen and develop their skills and capabilities for improvement to have greater impact on the business over time.

Let’s turn to music for a useful analogy. When learning music, a struggling musician does hundreds of repetitions to learn how to play a song. The repetitions (standard work) also help them increase their skill level and better understand the music, note by note. One has to spend years mastering the basics – learning how to play and to understand music – before one can begin to improvise or create a new versions of songs, with the intent to create something better than before.

The musician, therefore, has raised their capabilities to the level necessary to play music that sounds good.

Likewise, one has to learn kaizen well (Toyota-style, industrial engineering-based kaizen), through years of practice, before one can begin to create a new version or improvise. Instead, people evolve kaizen before they understand it or have mastered the basics. One of those basics is standard work.

Knowing how to create standard work is fundamental in kaizen, as it serves as a baseline for improvement and also helps people figure out the work and understand what is actually happening (akin to sheet music). Without standard work, the work is disconnected and chaotic, and does not flow. Kaizen without standard work means people don’t really know what is going on and they don’t understand the work. Therefore, they cannot improve the work in ways that have a big impact on the business and its customers.

The employees (and managers), therefore, have not raised their capabilities to the level necessary to do good work.

Predictably, people soon begin to say “kaizen doesn’t work.” Senior managers get frustrated, and when that happens, employees are now in harm’s way. Managers start to think about outsourcing, mergers, layoffs, pay and benefits cuts, furloughs, and other things that negatively affect employees.

So, there are good reasons to not (and never) be overconfident in one’s understanding of kaizen, and to not evolve kaizen before one has mastered the basics.

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Kaizen: A Comprehensive Business Strategy

My last four blog posts have explained kaizen in ways that go beyond the simplistic understanding of kaizen as “continuous improvement.”

• Kaizen: A Simple Tax Abatement Strategy
• Kaizen: A Simple Employee Wellness Strategy
• Kaizen: A Simple Innovation Strategy
• Kaizen: A Simple Leadership Development Strategy

They are intended to help people better understand the power of kaizen and to motivate them to direct their efforts to kaizen – even if it means diminishing or dropping other improvement activities.

Kaizen is a simple, one-word business strategy whose strength and comprehensive nature is deceptive. Kaizen is kryptonite to your competition.

If you were allowed to copy only one thing that Toyota did, it should be kaizen. Why? because it is Toyota’s industrial engineering-based kaizen that led to the Toyota production system (TPS) and The Toyota Way.

If you copy Toyota-style kaizen, it will lead you to success. It might lead you to TPS and The Toyota Way, or it could lead you to something better than that. Perhaps something much better than that. You won’t know unless you try.

While kaizen can be practiced in many different ways, it is Toyota-style industrial engineering-based kaizen that produces business results. There are numerous methods for achieving business results, as the image shows. But, most of these methods are zero-sum (win-lose), and inevitably turn key stakeholders against the business and its interests. That makes management’s job far more difficult.

If an organization faithfully practices Toyota-style industrial engineering-based kaizen, then its leader would not need to apply zero-sum methods to achieve business results. Think about that.

Kaizen also offers the opportunity for corporate redemption. As everyone knows, big corporations and corporate leaders are held in low regard by the public these days. Kaizen can restore faith, credibility, and trust in corporations, and also return its leaders to the now-forgotten role of industrial statesmen.

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Kaizen: A Simple Leadership Development Strategy

One thing we know for sure is that executives of big corporations are frustrated with leadership development programs. Internally-run programs have a high fall-out rate either through employee performance problems (e.g. book smart, but not practical smart) or poaching by recruiters. Leadership development programs supplied by third parties typically over-promise and under-deliver. Sure, corporate leadership development programs help some people here and there. But, they are expensive and largely unsuccessful.

These outcomes suggest that the common approaches taken for leadership development – e.g. competency models, emotional intelligence, and the like – are ineffective countermeasures because the actual problem and its root causes are not understood.

Toyota-style kaizen is a much better approach to leadership (and organizational) development because it embeds context, is connected to real work, changes mindsets, and the results are measurable. When used as the primary approach to leadership development, whether for new hires or veteran employees, kaizen delivers highly concentrated and deeply memorable learnings that can be applied across the entire business.

Kaizen teaches far more about cost, quality, delivery, lead-time, safety, people, processes, etc., than one could ever learn in school or by occupying staff management positions in finance, quality, engineering, human resources, operations, or IT. And it also teaches about non-cost costs, which nearly everyone ignores, but which can greatly impact long-term business success.

Every business needs leaders at all levels who understand costs. But school teaches only cost knowledge. Kaizen teaches cost awareness. There is a big difference between the two. It also teaches process awareness (flow), quality awareness, people awareness, and so on.

Every business also needs leaders at all levels who understand time. Importantly, kaizen teaches time awareness. Schools don’t teach that, nor do leadership development programs. That is a gaping hole that kaizen readily fills.

Kaizen also improves people’s capability for thinking, judgment, and making fact-based decisions. In other words, kaizen helps leaders avoid making common errors – errors that your competitors are surely making every day. If you don’t make those same errors, you will soon be way ahead of them. And kaizen teaches leaders how to develop other people so they can help to quickly improve the business.

Businesses are made up of people who, no matter the discipline, have largely been educated the same way in school and on-the-job. They have the same equipment, same computers, same software, same processes, same leadership development programs, etc. What does this tell us? They think the same way. But you don’t have to.

The distinguishing source of competitive advantage is leaders who understand and practice Toyota-style kaizen.

So, think of kaizen – kaizen forever – as a simple and low-cost leadership (and organizational) development strategy. Kaizen has so many positive knock-on effects that you will soon view the common methods once used to develop company leaders as both expensive and ineffective in relation to actual business needs.

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Kaizen: A Simple Innovation Strategy

One thing we know for sure is that executives of big corporations are frustrated at the slow pace and quality of organic innovation. Some of the problem is due to slow decision-making, bureaucracy, and the batch-and-queue stage-gate processes. These combine to reduce the curiosity and thinking required for innovation to flourish.

Not knowing the root cause, executives desperately grasp for solutions, the most prominent one of which is spending money to buy innovation from other companies and especially startups. The total cost of this approach is high because the company retains internal capabilities for innovation and also spend a lot of money to acquire it externally.

Innovation is very important to an organization’s survival because it drives sales growth. Innovative products and services command higher prices and larger profit margins. It also gives the customers and others the impression that the company is in-step with the times, attuned to customer’s wants and needs, reliable, trustworthy, and even exciting.

Yet, innovation is not just creating budgets for teams to develop new products and services. People must be allowed to think. Toyota-style kaizen creates a unique environment in which people are allowed to think and come up with ideas, and also immediately try them out.

Kaizen participants are nearly always surprised at what they were able to accomplish. They do in a few few days that which they could not accomplish in years. How does kaizen do this?

Kaizen teaches people to question everything and think differently about problems. This capability is a fundamental precursor to generating the flood of ideas that lead to innovation. Kaizen is guided by boundary conditions that channel people into using their brain instead of money to innovate. These boundary conditions take people back to zero, to help people see problems differently and identify numerous alternative solutions.

Kaizen also requires people to quickly test their ideas to determine which ones satisfy the need. So instead of “brainstorming,” the focus is on “trystorming” – trying out different ideas by quickly building prototypes and mock-ups, thereby learning with one’s hands.

Making things and learning with one’s hands is supremely important because it is a deeply encoded in human development over the millennia. People like to make things; they find it very satisfying. Employees – both managers and workers – should be given as many opportunities as possible to make things. You will be amazed at what they create.

The innovations that I have witnessed in kaizen, for both process improvement and new product development, is remarkable. But more than that, it develops employees’ capabilities and enables them to contribute fully to the organization – which is what most people want to do. It pleases employees and will also please customers and investors.

So, think of kaizen – kaizen forever – as a simple and low-cost (and largely budget-less) innovation strategy. Kaizen has so many positive knock-on effects that you will soon view the common methods once used to drive innovation as both plodding and ineffective.

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Kaizen: A Simple Employee Wellness Strategy

One thing we know for sure is that executives of big corporations have never been fond of salaried or hourly employees. The reason is simple: They cost too much. Costs include wages, health insurance and other benefits, savings plan contributions, payroll taxes, workman’s compensation, labor lawsuits, and so on. There is even the cost of executive’s time and patience. Executives find employees to be generally difficult to deal with, slow to execute on their plans, and, of course, responsible for any problem that may arise.

As a result, executives are constantly on the hunt to replace employees with technology. What they usually do not realize is that the total cost technology is expensive and it is usually inflexible when conditions change. The solution, obviously, is more technology, along with the hiring of additional highly paid employees to manage the technology.

Pragmatism suggests that it is wise to balance human work and technology work, which means employees will remain integral to the successful functioning of an organization. Why not, then, take actions that help employees prosper at while reducing the total cost of employees, particularly as it relates to healthcare – and also as it relates to innovation, productivity, and responsiveness to changing conditions.

Blame, humiliation, fear of layoffs, micromanaging, unknown expectations, overlapping roles and responsibilities, office politics, confusing direction from management, and other organizational maladies common in conventional management, make employees feel like they are not in control and exposes them to high levels of stress on a daily basis, which, in turn, harms employees’ mental and physical health.

Over time, chronic stress caused by chaotic batch-and-queue material and information processing can lead to atherosclerosis, hypertension, abdominal (visceral) fat, chromosome damage (telomeres unravel), weakened immune system, hippocampal atrophy (learning and memory center in the brain), neuron (nerve cell) damage, fear, anxiety, and depression. This affects managers as well as employees. Business, and those who lead it, should not cause harm to human health and well-being.

I described this in an e-book I wrote and published in 2012 titled Lean IS Healthcare. As is often the case, my work was ahead of its time. The book did not sell well, and so I unpublished it in 2015. But the salient, most impactful chapters were been re-published in Lean Is Not Mean (Lesson 66, “People and Processes;” Lesson 67, “Healthcare In Lean;” and Lesson 68, “Don’t Be a Stress Raiser”). You should read it.

What is the antidote to chronic stress? It is Toyota-style kaizen. Under appropriate leadership, kaizen, along with other Toyota problem-solving methods, puts workers in control of their work and creates order out of chaos. In Lean IS Healthcare, I said:

“Kaizen, done right, gives employees more involvement and say in what they do, and a sense of reward for their efforts. It humanizes the workplace and improves cross-functional teamwork, communication, and enthusiasm for work. Kaizen creates a better social environment and temporarily erases hierarchies. It promotes social affiliation and helps leaders to better understand the work that employees do (and vice versa, where employees participate in kaizen for managerial processes)….

I have presented 20 examples of Lean principles, methods (processes),and tools that deliver positive health benefits to the employees in organizations that understand and practice Lean management well. While this is not a complete list, you will find that other methods and tools deliver similar positive health benefits to all employees in an organization…

…my questions to senior managers who remain committed to batch-and-queue processing are: Don’t you want to have a better life at work? How can you be satisfied with your own work, when you have so little sense of control and predictability? How can you be satisfied that employees have so little sense of control and predictability? Why do you keep working in ways that make life so difficult for everyone? Why don’t you set people up to succeed? Don’t you want to improve the health and well-being of all employees?”

So, think of kaizen – kaizen forever – as a simple and low-cost employee wellness strategy. Kaizen has so many positive knock-on effects that you will soon view the common methods once used to improve employee health and wellness as both haphazard and limited in their effectiveness.

Kaizen, of course, is not a cure-all, and Lean businesses will always have problems. However, batch-and-queue businesses have many more problems. Healthcarelessness is everywhere in conventional management. Instead, switch to a management practice where mental and physical healthcare is built-in.

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Kaizen: A Simple Tax Abatement Strategy

One thing we know for sure is that executives of big corporations hate government taxes. They will do just about anything to avoid paying any kind of business tax to any government entity, and they will spend very large sums of money to reduce their tax burden.

Corporations spend money on internal tax departments staffed with expensive professionals and even more expensive external tax accountants and tax attorneys. They will reincorporate offshore, shift money from one country to another, lay off workers, shift inventories to suppliers, demand tax credits from states and cities in exchange for hiring people or remaining in place… the list goes on and on. And they will spend a lot of money on the inevitable legal defenses, back taxes, and fines when complex tax abatement strategies do not go according to plan.

But there is one thing that most executives will never do to avoid taxes. They will not eliminate the taxes that plague their own internal, company-made processes: Waste, unevenness, and unreasonableness. The combined rate of these three taxes is at least 30 percent. The intelligent way to reduce and eliminate these internal taxes is kaizen.

Were leaders to eliminate taxes in this way, it would be mostly free and involve only some changes in knowledge and perspective; quite easy to do if one has an open mind and is willing to challenge one’s preconceptions. To eliminate waste, unevenness, and unreasonableness more quickly, they could learn from a consultant such as Shingijutsu USA. Their cost would be modest compared to what a large corporation spends to avoid government taxes.

If executives were to participate in kaizen, they would also learn many wonderful honest little secrets from Shingijutsu USA that would greatly reduce taxes owed to governments, and never even come close to any moral or ethical boundaries. Along the way, sales and market share would grow, and fair taxes would be paid to governments without the added expense and risk of complex tax abatement strategies.

Rather than spending money to reduce their tax burden, leaders would learn the importance of spending ideas and developing employees’ capabilities. There is more to be had in these than can be found by expensive experts pouring over complex government tax codes.

Eliminating waste, unevenness, and unreasonableness is the same as cutting taxes – cutting a company’s self-imposed internal taxes. Yet nearly all executives prefer to go at it another way, in addition to the government tax abatement strategies mentioned above. They generate their own tax cut (i.e. lower overhead) by overproducing.

“Economies of scale” delivers apparent reductions in unit cost, enabling the lowering prices, which should, in turn, increase revenues. But this usually is accompanied by higher total cost due to sales incentives, lower inventory turns, rebates, higher debt, capital expense, etc., thereby undercutting revenues. It is the classic microeconomic supply-side argument for cutting internal taxes (overheads) through increased production – but while ignoring all diseconomies of scale. Needless to say, the standard cost absorption accounting system, upon which economies of scale depends, is itself an incentive to overproduce even when demand is slack.

The higher total costs incurred by economies of scale and standard cost absorption accounting soon require management to mercilessly cut budgets in response to high total costs that then do harm all stakeholders – employees, suppliers, communities, and, eventually, shareholders.

So, think of kaizen – kaizen forever – as a simple and low-cost tax abatement strategy to reduce both self-imposed internal taxes as well as government taxes that result from batch-and-queue material and information processing. It has so many positive knock-on effects that you come to view the common methods once used to improve business results as both ill-informed and destructive.

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