Take the Value-Stream Walk: Presentation by Jim Womack

when industry we put together as an army inaugural manufacturing Hall of Fame class in 2009 there were few Xuan's Jamal Mack however was one of them although he is a thought leader and not a manufacturer industry we wholeheartedly believed and still believes that Jim belongs in the very first manufacturing Hall of Fame class alongside industry Titans such as Lee Iacocca Jack Welch Steve Jobs and Andrew Grove one simple reason perhaps no one has done more to advance the cause of lean manufacturing than Jim Womack through his research at MIT his books such as the machine that changed the world this creation of the Lean Enterprise Institute the shop floor visits with managers and executives Jim has introduced revolutionary continuous improvement concepts codified the Lean vocabulary and helped countless manufacturers make the leap from simple simply employing lean tools to instituting management systems that produce concrete results day in and day out quote for a generation of managers Womack represents the Marcopolo of lean unquote industry declared and it's a December 2009 issue going on to say that Womack brought back from Japan reports of a more efficient way of manufacturing products and now familiar terms such as Kaizen Kanban and pokey okay for many people who study the practice who study and practice continuous improvement Jim Womack is synonymous with the phrase lean guru so in the spirit of lean I'm going to keep this introduction really short and I'd like you to please help me welcome Jim Womack to the stage well I don't know that's a lien guru and again we got rid of that silly picture of me that some guy from some glossy magazine not industry week came and took that silly picture and now it just pops up all over so you know lo with that I mean I don't why did I do that at least I wasn't in my underwear like Tom Peters okay wanted to talk a little bit about gimble walks and I'll explain what that means in a minute let me just bring you up to date on where I am these days because I have I had a change I looked the calendar and was shocked I subtracted 1948 from 2010 and came up with a very large number and so I said I need to find someone who is younger and wiser to replace me and so I found someone who is somewhat younger and a whole lot wiser John shook who now gets to do that to go to the office and try to run a business thing that I did so poorly for so many years and that means I've got more time to go walking and time to be an author which is so one of the few things that I might have some ability at so therefore I have been out walking around I have a book which I'll talk about just very briefly this is not a sales pitch for a book but I do have a book just out in the last 10 days well as I do that I'm always in a weird situation that I have never run anything and yet March win ski our PR communications person from LA I can in the corner tell you that I never ran le I either that it was just the pretend boss we had others Helen Zack my deputy actually ran the place so I am the manager management expert who's never managed anything I am the lean production guru who has never run a plant I have never led an improvement team I have spent my life being a bystander being a bystander Peter Drucker wrote a great memoir that I think you people read it's a shame called Adventures of a bystander and which Drucker says I'm perhaps the great management thinker of the 20th century and I never managed anything isn't that strange well that there are odd things in life but there are advantages to being a bystander actually there are a lot of advantages to being a bystander because you don't have to have any of the answers and let me suggest that you and your roles as manager leaders sometimes ought to think a little bit more like the bystander I have spent years and years simply asking questions not giving answers and yet somehow most managers learn that the bigger you are the more you should know and the more answers you should be able to give which is exactly totally completely utterly wrong so we'll talk a little bit about walking and what might be useful in walking let me say just a couple of other things that I'm particularly happy to be here this time against my better judgment I gave a talk for this plant conference 10 years ago and I violated my number-one fundamental principle no walk no talk and the reason was I was running a business while I was pretending to run a business and so I had no time to go see any of the winners and so an industry week called up this time I said would you do this by the way you don't get paid for doing this you just do this because you're a good guy I said okay there is a fee-only said while there's a fee and I said yeah I want to visit two of the winners and I'll do that on my time but I want to go out and walk around and I want to see what they're doing so I've been out to see two of the folks represented in this room I'm not going to say who you are I won't say a thing about you I was not there to judge you I was not out there to decide whether you really deserved a prize I was out there to get educated to do a little bit more of data collection that I've been doing for many years now to see where the world is where the world's going how people are feeling and that's how I learned I never ever walked through an operation without having an idea and maybe I'm just getting old and it's the same idea I had 20 years ago but I keep thinking I'm seeing new things and as long as it feels that way I'll keep doing it now the irony of how I got into this that my walking was commanded by General Motors this is a supreme irony I wrote a book in 1990 called machine that changed the world and which General Motors was the chump and Toyota was the hero and that book was possible because in 1981 MIT it had a long relationship with GM and we were two years into a car project with a bunch of academics and one of the senior GM executives called up and said gee have you noticed you guys don't actually know anything and I said well what do you mean sir and he said well you're doing a big big global project on the car industry and I bet young man you've never been in a car plant and I said well sir that is actually the case sir so I said I'm going to get your Hall Pass get you a Hall Pass and I want you to walk through General Motors now by the way that's the same thing that Peter Drucker was asked to do in 1944 and he wrote a book called concept to the corporation which if you haven't read you really should which is this sort of hymn of praise to modern management as pioneered by General Motors which at that time was the world benchmark it was absolutely the world benchmark that came out in 46 so here we go again and GM gave me a Hall Pass and said we want you to walk through the coming so I went out and took them literally I started walking and I walked through plants and I walked through supplier plants because GM was largely vertically integrated at that time before they got rid of all the parts and I walked through engineering and walked through sales and I walked through marketing and I walked through the dealer management organization and I walked and I walked in a walk and I learned something really interesting number one your intuition is really powerful if you'll just let it go and number two if you don't know how things are supposed to be just keep your mind open and think some very simple thoughts which I'll describe in a minute it's amazing how much you can learn and it's even useful to the people you're walking with crazy thing how could anybody at GM learn anything from somebody who does nothing about the car industry and that was a mutual exercise that went on for some years and I think we both learned a lot so that's how I got started and since that time I have been walking walking walking this I believe is the 13th or 14th week of the year and I did a little count on the plane this morning I have walked through 11 organizations so far and that's a couple of hospitals I consider a hospital plant and it's a couple of three totally different kind of manufacturing operations in the States and just down in Guatemala with an NGO walking through their Hospital last week of the week before so this is a large part of what I do now I say that just to remind you that I've looked at 11 things so far this year two of which are industry Week Prize winners and so I'm going to talk a little bit about some things I saw during those walks but you would be making a mistake to try to figure out who I'm talking about you can't figure it out because I again whenever I walk I try to show respect it says right there go see ask why show respect and bullet number four and you don't show respect by saying bad things about people who have been your host in this little book there 50 essays based on basically 50 walks that I took and I never identify any of the bad guys and I accepted something you read the newspaper something that's public knowledge that I try to be a respectful person at all times and so therefore I will have some things to say today about some situations but who knows who they are and I've designed it so I think you can't figure it out okay before I get any further though let me just make sure I know who you are they gave me the numbers which probably shown I don't know this morning I came down early this morning so I didn't get here in time but I think of you as really two groups of people for the most part you're either line manufacturing managers wine manufacturing managers anybody you guys actually run something this is good something I haven't done or you are leaders or members of improvement teams and as I counted that's about 75 80 percent of the audience and then there are two more groups which is people from some of the other functions and we'll talk about that and then if some consultants here who I suspect we're mostly in bullet number one or number two which is how they learned what they now advise on so I'm talking to you as if you are people who are either line or staff who are interested in improvement and interested in operational management and when I say let's talk walk that's who I'm going to take a walk with if you were all engineers in product development or if you were purchasing people or you were sales and marketing people or you are aftermarket product support service people I would have some different examples and talked a little bit differently about how to take a walk so that's who I am that's who you are give a walk to me is a practice my friend Mike rather has got a lovely book called Toyota kata you can leave the Toyota part out now we're all taking the Toyota part out kata is a practice that is becomes a habit and that becomes a way of continually seeing more it's one of those Japanese words if you don't like that we'll just call it a practice but taking a walk is a practice and what I'm doing when I'm trying to take a walk is trying to grasp the situation and I think every manager and every improvement team leader needs to be able to grasp the situation what I do see an awful lot of that's the dimming wheel of course PDCA or if you don't like that PDSA or if you don't like that hypothesis try reflect and adjust but what we really do well then we all know this we do the do part we really like to do part the plan part well we'll sue some of that and we hate to see in the a okay and the end of that but what I observe is that people start off to plan without ever having grasped the situation including what but seriously is the problem what's going on here so that my walks are designed to grasp the situation and hopefully to do that in collaboration with other people so that we grasp the situation together so just reading dr. dimming on the plane this morning I have a confession to make I had never actually been able to read all the way through out of the crisis I tried before dr. dimming was not a natural writer and I got my copy out and I just got a little break in my schedule and I said I'm actually going to read dimming and it's very interesting he doesn't talk about he has the dimming wheel but he never tells you what it is he never uses the term PDCA instead it's just a very simple sketch something it's just so clearly in my head I feel like that thing's been branded on me they kept looking from where's the PDCA thing and it's actually not there so I'm trying to grasp the situation so how would I get started which is to say where but why how when those are the questions that I want to answer another odd thing that I've been doing because now I've got time see what you do when you are a senior advisor is you do stuff you really want to do rather than go to office meetings and all that I don't have any have you've been involved with training within industry anybody know that trade with industry it's an amazing thing this is how the Americans won the war we had okay generals not said anything bad about any generals president but we had okay generals in World War two but what we really had a lot of those bombers and tanks and how do we get it we took millions of farmers and housewives and turn them into really good manufacturing people very quickly and we did it through Twi and then the second the war was over the whole country just went blue and threw it all in the trash and I was just looking at the little card by the way here's the PDC I PDCA on the T lui card from nineteen - but they asked at every job when they talk about job methods when you're talking to the worker about the job you say why are you doing this does this really need to be done what is the purpose where should you do this wind should you do it who should best qualified to do it and then how do you figure out the best way to do it which turns out to be the same pretty much that's what I've got here and I wrote those before I look at this so therefore I'm just going to go through real quickly those points about gimble walk and we'll see what we come up with well where would one take a gimbal walk well let's go to the gimbal now gimbal is one of those Japanese words that half of you hate and the other half of you really hate you know one more word but there's a real reason for this word because in a Japanese it's kind of metaphorical language I don't speak it but I've had people explain to me and it's the place where value is created do we have a word in our language for the place where value was created and by the way you hear gimbal and you hear shop floor but I hear gimbal if you're engineering the person sitting at the screen person doing prototyping at the bench you say here gimbal you hear shop floor I hear the salesman actually making the sale I hear the aftermarket Support Technician actually fixing the product from the customer standpoint those are the instance of value creation when something is being done to their product good or service that is going to help them in their life so that's gimble and I don't think there's an English sort of equivalent so therefore I decided I'll use it even though it's dragging something else into the language people seem to have gotten okay now about muda people still working on more on Murray still kind of chewing on that but the muda seems to be okay it's almost like it's English so gimble is the place where value is created where the real value creating work is done up by the way none of us in this room at this moment are creating any value for customers I mean I hate to say that but no one is going to buy your product okay just to ask yourself take your provider hat you've got a provider hat you got to consumer hat take your provider hat put your consumer hat on from and in think the last time you bought a product did you walk up to the desk the salesperson and say has this product got a lot of conferences in it I think and you also said how many S's in this product if you got six how many sigma you got seven sigma maybe in this product though guys we've got six you know you didn't say any of any of that right what we're doing here today is at best incidental work and that is if you learn something and go home and behave in a different better way well then we might create some value otherwise it's just Moodle but that's an important distinction in life there's work which is what the little people do to actually transform reality for the benefit of customers and then there's incidental work which us big folks the grown-ups do to help the little people and then there's Moodle which is actually what most of us do most of the time so whereas Gimbel they say it's an engineering operations customer support and there is a management gimbal it is an incidental work kimba but you can't create value on here let me make you feel better no individual in your operation can create value without management I'm not talking about you of course but in this country a lot of people production associates have tried to create value without any effective management and it turns out to be kind of hard work so therefore we're not bad just no customer wants to pay for us and we do need to think about that every day when we go in no customer wants to pay for us they do want to pay for what your people are doing but your people probably can't do the job without you so your necessary but not sufficient that's where let's go take a walk and what what's a walk well luckily use your feet if you want to look at a whole extended value creation process you might need a car and airplane and I do a fair bit of that as well but mostly you can use your feet it's kind of an amazing concept that you could learn something just by using your feet and note it is a horizontal journey it is a horizontal journey through a whole bunch of actions and activities that flow horizontally across your organization to the customer it's very important value flows horizontally across the organization across departments and areas and functions and even your organization and your suppliers and your customers who then finally get the product to your customers customers and why are you taking a leap why are you taking a walk we'll talk about a leaf in a minute why are you taking a walk well you want to do better you want to transform I get a lot of people calling me and that's how I get into a lot of these walks well-intentioned managers sometimes very senior managers say I want to transform my company could you come to the strategy meeting or the bonus boys meeting and tell us something inspiring and I say well I have a rule which I violated once for industry week but it's the only time in the last twenty years no walk no talk and by the way if we all took a walk together you wouldn't need to talk you know we could just cut that step out altogether we don't have to go to the club or the resort we could just stay right there in the factory and we might all learn something and they call because they want to do better and again I try to be respectful I think most human beings want to do better I want to do better you want to do better um Bret's they're involved in some kind of a leap already but they're not getting traction and they can't sustain can't sustain anything expect some of you've been there I've been there a few times in life and so they say gosh can we take a walk and talk about could you come talk to us and get the walk about sustainable improvement and I say let's go watch people try to improve and let's see what happens and then one of the most important things to me I say the thing I enjoy the most about walking is that I love to take young managers with me I think the most underrated thing any manager does is manufacture the next generation of managers but in this country we got an idea some time ago that you could outsource management education by sending people to management school let me suggest that no one ever learned how to manage a management school you can learn some good technical skills and how to do financial manipulations and how to merge and acquire and vest and so forth but you're not going to learn how to manage in a management school and most honest people there at MIT you're not going out a match you're going to learn how to manage from your boss you're going to learn how to manage bad you're going to learn how to match good and yet when you look at your job evaluation there's some thing some box to check there so did you do some mentoring but how I mean sure I did some mentoring you know I stayed late and talked to this poor guy who's overextend didn't going to get his home foreclosed and gave him a hug and well come on guys that's not mattering about mentoring in a meaningful way is to say hey let's go look at a situation together and let me ask you some questions by the way we have a wonderful book and I don't get any royalty on this so I'm not just shilling something called managing to learn that John shook my successor wrote it's just one of the best management books through us and it is a very simple story of a boss and his board and you see what happens when they try to solve a problem together and two things happen they countermeasure the problem I've tried to take solution out of my vocabulary I just talk about counter measuring they try to counter measure the problem and in the process that young man becomes a different person and he actually becomes more like a lean manager so I love walks where we got young people I did one of those here recently with a energetic young guy and I must say I just didn't feel he had ever had a real mentor and the time we got to the end of the day I just wanted to you know say hey why don't you just come work with me for a while we might learn something here they couldn't do that but that's why we're walking well wait a minute why can't you just figure this out in the conference room why can't you do this with PowerPoint by the way every time I go to a company even really good companies it is amazing the desperate need to take me to the conference room and show me PowerPoint to tell me what I'm going to see hey guys just unplug that thing let's throw it out the window why don't we just go look why do we have to turn this into PowerPoint it's an amazing thing by the way in the managing to learn book there's quite a lot of discussion about a3 which is the standard one-page problem countermeasure technique that we learn from the Toyota guys and one of the very best things about a3 is that you can't put it on a screen because you can't read it it's one of the things I love most about it you can put it on a wall and everybody stand there looking at it but you can't do it you sitting back there in a conference room on a screen because you can't read it it's an amusing thing to watch how people try to work their way around it and they D aggregated by all the little boxes and turn it into ten power points rather than one and then I go pull the plug out myself if you start that so what do you need to go take a walk and the answer is because two things number one life is complicated and number two the nature of all organizations is that they are vertical why should this be I don't know why it's gravity one G there it is you know why is the speed of light 186,000 miles a second organizations want to be vertical they want to have departments baffles dividers function silos and everybody wants to look up toward the boss and why well look there's good reason for that it's how we accumulate knowledge it's how we manage careers it's how we keep track of assets it's how we kind of feel like we know where we are and of course it's a prison no texting please no voicemail let's just stand here together looking this map perhaps we've created and talk about how together we can optimize the whole rather than separately optimize ourselves so that's what we're trying to do by the ways I've already said all values created at the bottom this is not some heroic ode of praise to the working person that's not the point it's just fact it could be good it could be bad but from your customer standpoint the person who's spraying the paint on the product or welding it or screwing it together that's the person that's creating the value not the boss of the boss's boss of the boss's boss's boss that all looks suspiciously like overhead and no customer has ever bought a product and said gee is there a lot of overhead in this thing in which case I will pay more you know get it get over this thing that overhead I want to pay more so as I say at the bottom the gimble walk the way I try to do it tries to help manage your see foe and reconcile the horizontal with the vertical it's really pretty simple now by the way I'll get to it in a minute but when I get to this point when we're just talking we're now I'm just talking at you but we were actually having a conversation people will say oh you're right you know we should have value stream managers and all the resources will report horizontally to the value stream manager and I say best of luck sounds to me like a matrix in the making those of you who've worked in matrix situations where you have two bosses will be scratching your head at this point I must say I just don't believe that's going to work I think there's something else that will work and we'll talk about that in a minute okay how well I went to see two of your winners and I've seen nine other organizations since the first year and the way it works is this I say please let's not go to the conference room what is the fundamental unit of value creation in your business and I believe it is the horizontal value stream do you even know what those are for your products its products that flow through a similar path by the way it could be in different buildings in different countries but they flow through a similar path and have the same things done to them so what are your product families hey when I start on this 15 years ago nobody knew now some people know say great why don't we pick one why don't we pick one of those and then let me ask you some questions now don't forget I almost never look at anything I know anything about this is a great advantage okay that you just get lost in the weeds when you know all this stuff but I'm asking the same questions every time I've given away my secret now you don't need me just ask these questions to yourself and on you can get the benefit I say look let's find a value stream and that's the same thing in my terms as a process now that word processing and confusing of the paint process but to me a process is I say in the bullet is a sequence of actions that must be taken correctly in the right order at the right time start to finish in order to create value for some customer so that's all I need so could we go take a look so that process is a sequence of actions that you cumulate into a value stream but of course it's flowing horizontally through a whole bunch of vertical processes the HR process the accounting process the IT process purchasing process the engineering process for manufacturing people and so on so you have an intersection not just a silos and horizontal value but of processes and that's why you have to think of it in system terms and all the system is is something that's interconnected so if something happens here it has an effect here and in fact every point in the system when you do something it hasn't effects somewhere else let's just think I was a spreadsheet you change the number here and all the numbers change here and so that is something that you have to keep in mind so just like the stream and by the way people always say well which one let's say well it doesn't make any difference by the way I can tell you from long variants that we're going to discover the same issues and all of your value streams we will and so just pick one let's not agonize over this you know the one that's given you the most pain the one that never gives you pain I don't care let's just pick one and take walk and then could we this is the hardest part could we get everybody together who touches this thing and can we take a walk together and then oh you know I got the calendars out everybody's look at the calendar and you know this is just a Rubik's Cube problem I've been doing a project with I think I can say this here with the the Food and Drug Administration of the United States and the process we're working on affects all of your lives particularly those of you who are getting older this is the drug authorization process it is a process and you have never seen silos like the silos they have in Washington DC in Silver Spring Maryland that this poor drug approval has to flow through so we had a very simple proposal let's get the heads of all the functions together to take a walk together everyone whips out their iPhone or their blackberry everybody goes to work and we've been working for three weeks to find take a day so we need a whole day whole day yeah to look at how you create value oh we're way behind already I love that one we're way behind already okay you keep working harder the way you're doing things and we'll see how much further you are behind by the time you finally agree to take a walk together but that's what you need there is no country there is no substitute for FaceTime and then we just desperately want to get away from FaceTime we want everything to be impersonal electronic you know and no we want nothing but side conversations okay hey we're all going to get together and talk about this thing women could I talk to you before the meeting well now after the meeting I need to talk to you they say no wait wait guys why don't we all just talk to each other right here and talk about the things that none of us wants to talk about and who knows life might even get better so we've now we've done the impossible we have gotten a group of people together we've picked a value stream and then my first question very simple what is purpose of this activity and that usually stops the conversation and I say what could we ask the customer because here's my observation about life that organizations survive and prosper because they do a better job of solving customer problems so I believe if you want to survive much less prosper this process this value stream must have some benefit for the customer so what customer problem is solving ah well now we're going to get them a green widget that we deliver just on the promised day with no defects at just the right price or whatever say fine okay now wait a minute you're sure that's good enough are you sure that's really going to solve the problem but let's assume for the minute of this all right well not that's your purpose how good is this value stream at solving that customer problem and they're just simple manufacturing things can you deliver it on time you know does it work does it have the right capability functionality did you put the cord in the box you know what about cost price your price must have something to do with your cost right I think so therefore if the price is too high it's probably because your cost is too high so let's just talk about what the issue here is by the way in the Food and Drug Administration I think I can say this that takes two billion dollars in 12 years to get a drug approved for sale in this country and in the days when you had the tight oligopoly in the drug game and they had lipitor god bless lipitor which is going off patent about four months all of you who you know at that age and that goes 12 billion dollars to the bottom line at Pfizer disappears in one day think about that running a business where you lose not 12 billion in revenue because there's practically no cost for that 12 billion you know it's all net and that made drug companies willing to put up with this crazy 12 years and 2 billion dollars and now they're saying we can't do it there are anymore lipitor ease we've hit all the home runs and so what are we going to do now so we got a look at the process and the customer by the way who's paying that I explained that the drug companies pay to have drugs approved so the FDA doesn't actually have an incentive from a financial standpoint to do better but they're all Doc's and PhDs and they're there because they want care and so their whole motivation is to cure the patient rather than to help the drug company but okay so now we got this clear this takes too long and it costs too much oh and then wait a minute no drug if you may have noticed is ever released into general use without being recalled for something our labels have to be put on you know by the way don't take it if you've got this don't take it if you've got that don't take it don't take it till finally you get that great long thing that comes with packing that tells you all the things that this kills you for right so therefore it's not a highly high-quality process it costs too much and it takes me long enough said can we now talk about why what is it about your process that makes it impossible at this point in time to truly solve your customers problem well now let's get back to you most of you make widgets or wedges or gadgets some of you are in the service business as well I realize but what are you do what is this process not doing that your customer needs so then we have to talk about how it actually works and I love this that people always want to tell you about how something is supposed to work and I had it happen again to me the other day this has happened time and again over the years that I was in a company and this was their value stream for their highest volume and also highest profit product and just when I started the walk the whole thing stopped and by the way was out for the day because they had a bad part from a supplier and they didn't have any extras and they said oh but this is not normal I say well gee you know I've been doing this for 30 years and I never see anything that's normal it must be me or is it you is it me or is it you let's talk about what's really here and by the way will often just draw a little map and then the third question for me is once we see how the process works and what the problem is I have a third question and then the prosecution rest I say how do you engage your people in addressing these problems how do you engage how do you improve how do you get better just tell me and by the way let me talk to the people let's hear from them so that is what I do very simple thing now you don't need me each product family what's the problem or what's the customer probably not solving what's the actual state of the process what's actually happening and by the way many of the bad things that are happening are because the functions don't align or the people are aligned with management and it just jumps out at you when you're just standing there looking now by the way you could draw map or not I've been doing this so long really you know all the time since about 1980 or 81 that for me I don't need to draw map I can just see it it just jumps right into my head about five minutes discussion I can kind of figure out the purpose thing and I just walk through the process I could just immediately take a pen I could say look here's how information management works here are all the steps here's rough capability here's the availability here's the well you know if you do something for 30 years you're probably going to get a little better at it even though I don't know anything about it but some people feel the comfort of a crutch that's why we introduced this this is the famous map from learning to see the acne stamping example now remember this is a process layout Factory a process village Factory so that you don't see any of this unless you've trained your head to see it that there's a stamping Department there's a welding Department there's an assembly Department shipping department they're all in their own little ghetto and so therefore there's no line of sight visibility about what's going on there's an MRP that's busy skidding the wrong instructions the one thing that's actually not if I were doing this map over and it's John Shooks Maps I can't really touch it but what I would show is the on the floor change of the production sequence that the line management's doing every minute because this is wrong this is wrong we don't have any parts for that what are we going to do so there are actually two scheduling systems there's the official system that's kind of coming down from the rafters and then there's what people do to get through the day and that that's not on there and that's really important so the how it's really working is not drawn as fully as it should be but over the steps what we've written on all of those is how capable are they in other words what's the defector turned back rate how available are they what's the uptime when I say uptime I mean it will run if you need it to run not utilization but simply can it run in Asia run how flexible is it if you got a bottleneck you've got a capacity constraint somewhere all those things we just put in little boxes and then by the way when you do this the one thing you always learn in life is that it takes crazy amounts of time on this planet at this point in time to do anything and in this example which is you know for an old-fashioned operation kind of typical that it takes basically 30 days to do three minutes work and so then that gets you thinking about one ax wait a minute why would it take in and women we can't respond to customer orders because we have to start 30 days in advance and customers change their mind all the time and then the MRP is always sending the wrong instructions anyway and so on and so it gets you started but whether you need that map or not is not the point the objective of the walk is not to drum out it's not to solve a problem a specific problem it's not to plan to do to check or to act it is to grasp the situation about how good your organization is at knowing what its purpose is how good a typical process is and how people are currently engaged if at all if effectively in trying to make it better it's amazing how much you learn just walking along and then of course once you understand well you can start having an intelligent cross functional cross department across area discussion about how can we do better well by the way everybody's standing up okay well who should do this well here's the hard part of course oh well gee I wish we had a world in which we had CEOs and CE OS that could actually take a walk now here's what I observe when CEOs and CEOs do take walk one of two things happens they either make ridiculous suggestions what you need here is 7's we need to repaint this floor you know everybody should get their uniform washed more often whatever just nonsense it's got nothing to do with anything because the big man is supposed to say something or you know what to do or they get an easel or a flat-screen at every point where they stop that tells them what they're seeing and they nod sagely and I've been on those tours with high-priced CEOs and here you have the easel or the flatscreen standing right next to a production area that tells you what wonderful things have been done and what you're seeing and all you have to do is crank your head 90 degrees and stand there for just stand there for a minute and you will realize that what's in the video and what's actually happening you're two totally different things and by the way the CEO never says anything just keeps on walking get me out of here okay what a shame that you know bosses are traumatized because they think they're supposed to have answers because they get paid so much it's one of the great burdens with the crazy money we pay CEOs in this country you really have to try to pretend you're worth it right so therefore you should have the answers right this is completely ludicrous okay so I wish CEOs and CEO lows could do this it would be a better world not because they're going to do anything other than just in their own mind grasp their situation in their company how are we doing are we able to define what product we're going to solve for the customer and how we're doing do we have the ability as a team to see our value creating process are we effectively engaging our people respectfully in making things better well that would be great if that would happen in by the way if there really were what I call value stream leaders which is a person this is not a job this is a way of being somebody has got their head around this and any value stream you've got there would be somebody who says you know it's not my job but I've taken the responsibility to really keep on top of this thing now out walking these last what is it 14 weeks one operation I visited sticks in mind it was a plant with a plant manager small plant maybe 150 people and the plant manager met me at the door and we did go to the conference room it wasn't too painful you know but I said could we get out of here but then I said what's your purpose and they said well you know you've really got to talk from a value stream standpoint whoa this guy's okay and we got three value streams the plant looks complicated when you go in but actually there are only three things we're doing there three product families here and I know exactly what our customer problem with everyone is and the first one there's been a big boost of demand but I don't think it's sustainable and my people are saying hire people and add machines and I'm saying no we got to figure out some way to make more with what we got because this thing going to last and the second one has some quality issues and the third one which is more of a job shot kind of deal where they do short runs on special special orders we're just not flexible enough that we just can't we can't get it done fast enough get set up and run it so I thought this is really good and then I talked with people who were clearly quite engaged in how they actually improve things I thought gosh you know if everybody I met with like this this would be a different country I think you had a talk early this morning about how American could become a manufacturing power again and just from the notes I read on it about it with the gentlemen here but it was all kind of stuff outside the box it's kind of Tax Policy and this and that and so forth and I'm saying wave it and what I'm really concerned about what's inside the box what are you doing with your people to make us world beaters rather than how we're going to change the environment that's going to make it work oh by the way here's my big fear right now on what's happening that because our dollar is sinking and because we can't afford to buy butter foreign products my fear is that it will now be safe to be mediocre manufacturers in this country okay that the cloud passed over we're now poor so we can't buy stuff so we have to make it ourselves and we start patting ourselves on the back about wow we really did it whereas in fact we haven't proved at all it's just that for various reasons customers have less choice that is my nightmare fear about where we might wind up so please don't let that happen I'm just a bystander you're the people who actually can keep that from happening so look I love the idea of having value stream manager in this case the plant manager small plant clearly had all three of his value streams he absolutely headed his mind's eye he didn't need to take a step he could describe the whole thing and he could tell me exactly how they were doing and I thought whoa that would be wonderful if that was the way it was everywhere but it's not so they say the CEO MC I usually like both aknowledge encouraged and mostly when I say who is the responsible person for this value stream well when you ask enough questions you finally figure this poor product that somehow or they got through this thing is an orphan it just wandered through and it actually got out at the end must have been a tough go so a by the way I love the word responsibility the general at lunch was talking about accountability accountability the sort of implication is that I'm going to come around and check about responsibility as someone who says you know I'm just going to make this happen you don't even have to check on me I'm going to make this happen future is going to be better than the past because of me and I'm going to do it right now when you read if you do and I hope you will the little book managing to learn that John has written that young man he has remember he has the teacher this is boss young man and he has given the responsibility for fixing in having a process not one person working in that process reports to this young man not one and if boss tells them says a young man you need to lead as if you have no authority I am asking you to take the responsibility that is so powerful forget about Authority take the responsibility make it happen so that leaves you the CEO and the CEO and I know we've got a few CEOs of smaller companies here cos of smaller companies but if there's no value stream responsible and the CEO and the CEO aren't well that leaves you and those are some categories of things that some of you do toward the top and probably going to have too many sales managers here who are looking downstream our purchasing managers are looking upstream and my gosh I wish I could turn every purchasing person in America into a process thinker that purchasing still for the most part is about the squeeze and about expediting parts and you can't get anywhere with that you can get a little ware for a short period of time but that's what we need so look I hope the oves of you who are plant managers those of you who are VPS for ops those of you who are area managers can step up do a little thinking about how you could be a walker and do some good by the way you're familiar with the term management by walking around in BWA popularized by Tom Peters that is probably not what I mean but if you remember the management by walking around idea was that the big boss jumps in this car goes flying over to the customer says how do you think we're doing and then wrong goes the other way the supplier and says how do you think we're doing and then runs down to the plant and talks to the machine operator and says if you've got any ideas for improvement and then runs to engineering and talks to the young engineer and says do you have any blockbuster ideas that was in his book called passion for excellence I think it is not coincidental that his next book was called thriving on chaos that that is don't whatever you heard from this you didn't hear try managed by walking around by gimbal walk is very focused it has a very clear purpose which is to determine customer purpose and whether you're addressing it what about our process how does it really work how are we engaging our people what do we need to do now by the way once you've grasped that situation well then it's time to do a lot of PDCA and we're pretty good at that we sort of understand that technically but there has to be a context okay almost at the end here what might you do this well before convinced before starting a big transformation don't you have to grasp your situation before you take a big leap hey as often as necessary you know take these pills as often as necessary when you feel you really don't know how your process is addressing your purpose and how you're engaging your people and look in some cases maybe you even need to take a walk every day this is just an aside at the end but this is the management Gimbel walk I was just in a company that I dearly loved that I've even put in a book in the past but they don't want visitors so I won't tell you about them just for the moment but what I went on was the gimble walk in which the head of the company heads out every morning at 8:00 and he goes to every area in operations where there is bored and what's on the board is a list of what the cross-functional issues are and every person in every area goes along and in real-time they decide what are we going to do and then at 10 o'clock he goes through all the functions that sales marketing engineering productions HR everybody goes and they take a walk around looking at boards that show what the current state is what the issues are and in real time they resolve problems those of you who do have a product development role may think gosh sounds like the Abbaye room a bear room if you remember is a way to take a walk without having to go very far because all of the teams that are involved in a development project each has the board each has their problems everybody walks around together and you do real time problem resolution on where you stand now their books being written about that now what a wonderful idea I'm going to try to write something about this a company I was just out looking at one of the eleven I've looked at this year so they're different ways to take walks but walking is good okay here's my hypothesis that this is a great way to truly grasp your situation so that good lean things can happen and it's audits of practice once you fall into it and I've been into it for thirty years but once you get into it it's sort of like breathing it's just obvious don't we periodically need to go take a walk you need to do this together we need to be honest we need to be respectful we need to grasp our situation not something you can do in a conference room not something you could do it the strategy retreat not something that's part of the annual plan necessarily but a practice which you can learn by doing it's the only way you can learn and which you can learn from doing so think about that I'd be happy if anybody wants to talk a little bit I'm not in the consulting business but if you've got questions I've got an email and I'd be happy to go back and forth I'm going to be here for the rest of the day and I gather this evening got to go out to the ballpark there's no ball team but we're going to the ballpark I'm still scratching my head on that one but we'll figure it out I don't know II think the mood out or so anyway no limit they took the value out so they took the value out okay look that's the book Chet will be happy to sell you one hey you know I got to make a living somehow by the way this book is not about this is not that much book on a single topic of Kimble walks there's one essay on gimble walks there are 49 other essays on things that occurred to me while I was walking over the last 10 years and I put them together organize them by theme and given them a context I'm told it's a great airplane book it's also a good doorstop it's very substantial and there's a you know the Kindle version if you don't like molecules so thank you and let's take a few questions and then we'll get you on your way got some mics there and with with value being added on the plant floor and looking at continuous improvement and the engine for continuous improvement being the people doing continuous improvement all the time what do you look for on the gimble walks it kind of helps you measure or size up the people side of the process and then I'm going to twos improvement well if you ask about what if you whoops I'm going to get some feedback there isn't it supposed to stand there um I want to see something that somebody's trying to improve and I want to ask about it what happened by the way there is a whole lot more improved and stays improved okay that's kind of the nature things you know the Saban I get to the end of year and you've done 100 Kies ends and you've got one Kaizen worth of benefit because the other 99 sort of disappeared so what I'm asking is hey could we just here you know with the folks are doing the work of what improvement activities have you been involved in and what happened and was that a good result did you get a good result is your improvement process capable is it repeatable and you hear some really interesting things when you ask they're not all good things and that's good that it would be pretty shocking if they were all good things because we don't see that much sustainable improvement so I tried by the way to be very respectful they just say one word about the concept of respect I do what I'm not walking around and you should as managers feel free to ask hard questions and people's first reaction when they tell you something that this just can't be the whole story and so then you ask the follow-up question and the follow-up question and the follow-up question first reaction is a human being is that that's sort of aggressive and hostile but actually it's the highest form of respect what I'm saying to those folks as you know I think there's more to this story I think there's more they tell me I think you thought about this could you please share your experience with me including the bad stuff and I think that's actually the best form of respect there is to ask people hard questions but with an earnest manner in which you say gosh let me ask you some hard things but we're all going to be better off for trying to answer these so now tell me about that you tell me that but I still understand why and understand why it's so that's what I try to do you thank you I have a leadership team that is supporting us in our op ex efforts lean and and everything we're working on but I also have a problem in that there's a strong financial requirement on absorption in the plant and yeah we're seeing the numbers going the wrong way is there some magic message I can give them well let me just - other way you can do this but a message let's get him involved in some improvement that my friend good friend or humate who did a book called real numbers that you might want to read but Ori was a complete total Orthodox being countered blockhead before arteburn and I sort of arrived at war mode as an observer just when this was happening art put ori his CFO in charge of an improvement activity to reduce set-up time and this seen on these are stamping another kinds of machines and this seems like a completely absurd thing to do that the CFO said but i don't know anything i don't want to waste time on this why are you doing this to me and art said well because of the way you think is detrimental to the company so i thought we would just let you see how your thought process intersects with our need and the way to do that would be to go out and look at this issue and it changed our life and it wasn't changed in over dinner it wasn't changed in a classroom that he was actually put in a situation where he could see for himself what was happening as they reduce set-up time and then of course their inventories were plummeting which by the way when their profits were plummeting because the way you do accounting sometimes we're probably where inventories are an asset well as you bleed off assets where your short-term profitability goes down that's an example of getting somebody to actually go look at the reality of value creation as opposed to the artificiality of the way we keep score you know almost all scoring systems are bad in some way because all scoring systems can be gamed and no scoring system really very accurately captures fundamental reality so that what I want to do when I talk to finance people and say have you ever actually rolled up your sleeves and tried to participate in what value creation really is and then you can you work backwards to think about how we should do accounting that causes people to do more with less to do the right thing every time it's a really interesting little exercise what kind of a scoreboard do you need to get people to do the right thing and there's no perfect scoreboard what I do see in companies all the time is more and more and more elaborate scoreboards more and more things being measured and it's all measuring outputs results and of course the people are playing the game or saying but we don't know how to do better so number one you've got more metrics and more accountability and then you're either giving us incentives or you're giving us penalties and the only thing we haven't talked about is how you actually create more value it's kind of like out at the ballpark tonight I'm sure they've got a heck of a scoreboard and the team's not doing very well so the owner says well let's build a bigger scoreboard because we need more data on conversion ratios and you know whether you struck out on the third pitch or the second pitch or the ninth pitch or whatever and the players are saying but we don't know how to bat and catch and then the owner says no problem let me give you bonuses and then you're still losing games let's make bigger bonuses you know the next guy to get a home run gets 10 million dollars and the guy says but I don't know which end of the bat to hold and it's just a crazy crazy thing of trying to instead of starting with the process of how you create value you start with a scoreboard and yet that is what sort of modern management has gotten us to by the way I do have a nice little essay I think in this book on modern management versus lean management and you might want to just take a look at that and ask yourself what kind of company you work in if you work in a modern management company you've got problems if you work in a lien management company you're very lucky because there aren't very many of them but you just might want to think what kind of company are you most of you if I may say no insult intended because I'm not really talking about you but about your CEO and your CFO and your CEO oh and so forth our pretty Orthodox modern managers that's the GM GE system that's had some bells and whistles put on it but it really hasn't changed in about a hundred years and I think we need to get way beyond that so I've got a few suggestions on how to do that let's say they've got time for one more question and then folks have to go to the next thing maybe we don't even yeah let's do one more here hi Jim my question is if the CEO participates in the gamble walk across a value stream and maybe there are thirteen functions across the value stream and there are three layers of management vertically in that value stream how does he position it so those managers don't feel disempowered by the process hmm disempowered well look first off we're what we're trying to do here is just collectively get to agreement on our situation and so the point is not what do we do right now immediately with regard to PDCA can we reach agreement on how we really work together can we reach agreement on what we do to create value can we just talk about this a little bit with everybody present looking at the real stuff which is what the little people are doing to do things for the customer and what the big folks are often mostly 40 so let's talk about that now look that might be a little bit off-putting to some of your managers there are a lot of people who really do like their offices and they really do like PowerPoint and they really do like the conference room and they really do like all those side conversations where you're going to try to do side deals so that you don't have to do what it was you just agreed to in the team meeting okay but we all know that's bad we all we shouldn't do that so let's stop doing it and one good way to get started on that is to take a walk together so with that let me send you off to the next thing I'm going to appear around in our little booth and happy to talk to anybody I'm here under your sir your management and I will do whatever it is I'm supposed to do but I am here to talk to anybody who wants to talk thank you so much for being such an attentive group let us be clear on the way out you're not actually creating the value but the people you're managing are creating the value in the future for any country whether it's bright or it's hopeless is based on how much value a given group of people can create in the future compared to how much they're creating now so we've either just wasted an hour that was all Moodle or there's a few ideas here somewhere that are worth an experiment think of doing taking a walk as an experiment so please I hope take some experiments if you do something or discover something or find something give me a call I write books my biggest problem as an author of what let's call business books is that I don't want to write fiction if you've read a lot of business books you will know they are mostly fiction and if you don't know it you should as I do go visit the company they were writing about and why are they writing fiction it's because there really isn't a good story to tell I want to write true books but I can't write true books unless somebody does something good improve something in a dramatic and sustainable way that's not going to be me because I don't write anything that's going to be you so if you do something brilliant and you want to be in a book or in an article let me know and I can make you famous for up to 15 minutes okay thank you you you

Channel: IndustryWeek TV

Views: 61,555

Rating: 4.771812 out of 5

Keywords: James Womack, Jim Womack, Lean, value stream

Id: M2lp1QDbXWE

Length: 66min 15sec (3975 seconds)

Published: Tue Jul 17 2012