The Spirit of the Compression Movement
Robert (Doc) Hall, Ret’d Professor Emeritus, Kelly School of Business, key founder of the Association For Manufacturing Excellence, the founder of AME Target Magazine, and the founder of the Compression Institute. He is very concerned with the future we face – a future that will need all of us to do much more with less. Charlotte McDonald’s June 16th, 2015 BBC News article helped put this in perspective when she reported that: “If everyone on the planet consumed as much as the average US citizen, four Earths would be needed to sustain them.” Other experts have calculated five. It does not need a lot of thought to agree. Doc has spent many decades encouraging ‘more with less’ into his advancement of Lean Thinking through his teachings and his AME leadership and Lean now pervades all sectors. The Compression Institute is bringing together people who share concern for the future. If you too, share Doc’s concern, visit http://compression.org and for a clear grasp of the case for Compression, visit http://compression.org/compression/the-case
It is certain that all of our futures will be filled with more Vigorous Learning than many have experienced so far. The following article provides Doc’s insight into such Vigorous Learning Organizations and the role within Compression.
Vigorous Learning Organizations
For 21st Century Challenges
Robert W. “Doc” Hall
Chairman, Compression Institute
If your lean journey has successfully streamlined operations and empowered the workforce, congratulations, that trek is seldom easy, and hopefully it gave you an edge on competition. But lean is one opening to a much bigger vision – and one badly needed.
At maturity, lean is an ongoing problem seeking and problem solving method. The world, always changing, keeps throwing curves at us. There is no such thing as lean once; lean forever. Indeed, even companies fade away. All are projects, or series of projects. Most die aborning, a few last for centuries, and those we know are in between.
The 21st century keeps throwing more curves faster: technology, environmental issues, and human system complexity moving faster than we can track. One pessimist saw his tea leaves portending another global financial collapse precisely at 11 a.m. on October 13, 2015. Our risk analysis of future cash flows usually ignores such tips, but we do live in a time of great uncertainty, so a recent buzzword is “resilient,” meaning being able to survive and thrive no matter what hits us.
Financial hedging is one resilience strategy. Hedging and insurance ease the financial impact of disasters, but they do not make them disappear, and you cannot insure against having to totally rethink a business. A resilient organization rolls with punches, adapting to big changes quickly. That’s what is increasingly needed in the 21st century.
An example of production resilience illustrates the need. Lean critics contend that a lean company lacks the reserves to overcome a disaster like a fire in a plant. However, resilience does not reside in inventory. That only adds time to resolve a problem; it does not resolve it. Toyota has worked around two major fires in supplier plants in days, and their TPS system remains intact. Resolution was by deeply skilled, cross-trained people with backup equipment and tooling going into fire drill mode.
A resilient production system can turn on a dime, executing schedule changes and engineering changes very quickly. Transforming to make very different products might take slightly longer. It’s the opposite of equipment so specialized that doing something different is impossible. But beyond production resilience is strategic resilience, ability for an entire organization to transform and operate very differently. (Imagine factories of the future being neighborhood 3D shops and recycling processors.)
Today resilience too often suggests only measures to “assure” that old processes (and cash flows) keep going. One measure may be buying time by lobbying to make change illegal, a political version of building huge inventories.
What is a deep transformation? Suppose incorrect product use risks the safety of customers. Can you shift your business model to selling process research and education, with the product being incidental? Or say you have a line of meters to help housing clusters save a lot of water and electricity. However, communities don’t know what to do – have no program to develop integrated systems using them, so you have to develop the programs. Or worst, your customers discover that doing nothing benefits them more than using your product. Besides quandaries like this, could materials shortages and environmental issues hit you?
Overview of the Vigorous Learning Organization
Companies that turn such challenges into opportunities seem to be Vigorous Learning Organizations, per the diagram in Figure 1. It is an amalgamation of practices in the very best companies seen over a 30-year period. Besides healthy lean initiatives, all were very good in many other ways. Toyota is one, but Sekisui Housing and Ventana were considered better, primarily because they aggressively help customers solve problems, pushing qualitative change, not volume growth. Toyota is still in volume competition with other big vehicle companies. (The auto industry is beginning to question the waste inherent in their competitive business models. Eventually this could re-conceptualize the entire industry, leading to a state way beyond “competitive advantage in markets.”)
Organizational management and governance that worked during 20th century expansion can’t cope with the uncertainties beginning to disrupt business-as-usual. We must learn to consider much more in every decision and think longer term. To do this, the Vigorous Learning Organization appears to be a direction. “Vigorous” signifies that learning is first-hand, by people collectively self-learning from experience, not hundreds of training hours from experts. The elements of a Vigorous Learning Organization are:
1. Transformative Leadership:
Also aptly termed Leadership for Learning. Two observable characteristics stand out. One is that leaders guide an organization in new directions that may seem radical. The second is that they give direct orders only when necessary. They lead by asking questions, expecting people to think, and they spend much of their time developing people to collectively solve problems. Without transformative leadership, a Vigorous Learning Organization cannot really develop.
2. See the Whole:
Ability to see why and not just what. Holistic thinkers are curious. They think connections, relationships. Value stream mapping may be a start, but keep going, asking deeper questions. Exactly what value is being created for customers and other stakeholders? Should you include the environment in a list of “stakeholders?”
This kind of thinking is beyond guiding a company to make money (hard enough), or even beyond most kaizen problem solving, which usually concentrates on efficiency. Instead, guide an organization toward becoming more effective for all its stakeholders. Tough to do, and perfection is impossible, but a very different perspective from business school convention. So what is the breadth of perspective of your board? Perhaps a more stakeholder inclusive form of company governance is needed.
3. Transformative Common Mission:
Observed in every best company was a mission inspiring people to work for reasons other than money. It might not have been plastered on every wall, but it was sensed. For example, the de facto mission at Ventana Medical Systems was “find cancer faster” – pretty inspiring. Their more abstract mission is to improve the quality of life of patients. Should they learn how to detect cancer instantly, new horizons await.
Money does not inspire in the same way as a socially beneficial mission. If a company lacks a mission that engages everyone, perhaps it should question what it does from a larger perspective. If it does have an inspiring mission, leadership can create a future vision and a pathway leading toward it. And the mission should be transformative, much livelier than a platitude from a stagnant company just trying to keep cash flow. Once a leadership team has a transformative mission with a vision, lean literature is loaded with collaborative methods like hoshin kanri to align everyone.
4. Rigorous Learning System:
Many companies are into problem solving using a format based on PDCA, the old Deming Circle, or using one of many derivatives from it. They vary in rigor of use, but rigor is the key to changing thinking. The best systems, need people to go through the thinking when they fill out different forms. Repetition makes rigor habitual.
The best companies have user-friendly record systems that report actions taken in context, and often in a PDCA-like format, but the key is discipline of people to enter findings in a way that others can interpret. Discipline in this sense is rigor from acquired habits. Once they are engrained, the organization increases ability to clearly communicate. They have a common problem solving language.
These systems work well for definable problems: they may be hard to define and solve, but people can agree that a problem exists; they can learn to agree on facts; and they seldom dispute whether a countermeasure was beneficial. Not so for problems sometimes labeled “wicked” because they are characterized by doubt, dispute, and division. The situation and all countermeasures seem to be win/lose. Problem context is hazy. Perspectives and beliefs clash. Prior experience may blind us to the obvious, and resolution may involve changing us, not just changing processes.
In this case, resolution requires “structured dialog” with rules, and the first few rounds among stakeholders in a problem strives only to understand facts and perspectives from different views. Such a problem rarely has a clear answer. It may be resolved; that is, some agreement for change may be reached. Or sometimes it is dissolved: adopt a different point of view or belief and the problem melts away. (If public nudity no longer offends you, then it is no longer a problem – at least not in the same sense.)
5. Behavior for Learning:
The long-term objective is an organization so collaborative in their internal confrontations that they can resolve tough issues as a team, and it leads to “flex-structured” organization, an organic, adaptable concept rather than 20th century command-and-control hierarchies. Instead, the learning system becomes part of the glue holding it together. To do this, leaders for learning have to inculcate behavioral self-restraint while capturing the imaginative potential from diverse ideas.
A place to start is better rules for meetings. These may be better accepted if people devise them themselves. The aim is simple: rules during meetings to keep participants from finger-pointing, promoting self-serving agendas, drifting off subject, etc. Most companies already have rules for meetings, and they can usually be improved if meeting rules include self-policing to enforce them during meetings.
Another practice to foster is mentoring; learning to mentor and to be mentored. This is most effective for imparting tacit knowledge or behavioral improvement. Consciously learning how to be a mentor pushes us to be more tactful – to behave to improve collective learning. The mentor learns, not just the mentee. (Yes, with some people tact doesn’t work, but we are building up the people for which it does.)
Obviously, there is a lot more to being a Vigorous Learning Organization, but much of it you can learn as you go, learning by doing. Eventually you will transform an organization to become something very different, and one highly adaptive to change. And at the bottom of Figure 1 is a cultural caveat: build in a few behavioral practices to make them self-reinforcing; otherwise we quickly revert to normal human strife and politicking.
Where to start? By becoming a transformative leader and promoting learning. Learn a lot yourself and nudge others to do the same. If you don’t already, start to practice leading by asking questions, not directing people. Stimulate others to think.
And why is becoming a Vigorous Learning Organization important? Because helping ourselves and all our stakeholders to navigate the chaos and complexity coming in the 21st century takes a steep increase in organizational capability from that which was adequate to make and market widgets in the 20th century.