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Michael Balle

Michael Ballé: The company learns as long as the CEO learns at the gemba by supporting kaizen

By Michael Balle, co-author of The Gold Mine and The Lean Manager - Last updated: Sunday, July 22, 2012 - Save & Share - Leave a comment

The CEO of a construction company once told me that the day he was bored with the gemba, he’d better sell the firm. This, from a CEO who has more than quadrupled the value of his company in the past five years. This CEO has figured out that the company continues to learn as long as he continues to learn, and the gemba is where true fact-based learning happens.

Senior management has a disproportionate impact on the firm because of its role modeling role. Chris Argyris, the influential organizational theorist that formulated “double-loop” learning pointed out the distinction between “espoused theory” – what people say about how they would react in a certain situation when asked – and “theory-in-use” – how they actually react when the situation occurs. It’s no surprise that behavior rarely fits consistently with espoused theory and that what people think and tell about themselves differs with how they actually behave.

This ubiquitous distinction affects business success in two important ways. Firstly, what customers tell you they’d like and what they’re actually prepared to pay for is rarely the same. Lean starts with principle number one: specify value. Our first question is to make sure we’re keeping a constant focus on figuring out what customers really like, regardless of what they say. This involves treating every delivery as an experiment to learn empirically about our customers. The short answer to your question is: as long as you keep focused on deep investigation of customer complaints, you should be fine. Customer complaint are unique inasmuch as customers actually take the trouble to educate you about something they feel strongly enough to act.

The second aspect where the discrepancy between espoused theory and theory-in-use has disproportionate effects is top management intentions and subsequent behavior. Between following management’s good intentions and behaving according to what management actually rewards, which way do you expect employees to react? Organizations are made of people, and people take their cues from their leaders. How do you ensure constant focus and momentum in your lean transformation? By keeping interested and demonstrating to all your theory-in-use is lean thinking.

The bedrock of lean transformation is going to gemba to get every one to agree on problems – which involves making sure employees feel comfortable in highlighting problems and discussing issues with their management, even when the information goes against management’s hopes and wishes.

This is what the CEO of the lean construction company strives to do by dedicating two days a week to visiting construction sites. On the site, he tours the latest progress and looks at the visual management boards where project managers spell out their latest technical issues, their understanding of the causes, and what they’re doing about it. This involves:

  1. Going to the shop floor frequently to discuss detailed problems with operators, frontline management and the hierarchical line;
  2. Assume that every problem you spot has been created by a company policy at some point, and pursue enquiry until you’ve figured it out;
  3. Don’t solve the problem yourself, but task middle-managers to run with the issue and try new ways in search of a possible solution;
  4. Go back and check how they’ve gone about it, encourage them to think more deeply and discuss with your top management team to draw the right conclusions.

As the CEO explains, this is where lean knowledge is absolutely necessary. Without a good grasp of value, flow, pull and perfection, it can be very hard to correctly interpret what is really going on. So, as the leader of the company, he continues to work with his sensei, read every book he can find on lean, go to conferences and generally build up his own understanding of how to become lean, not do lean. Overall, this has worked well for him as, over the past five years, he has doubled his turnover, steadily grown his profitability and multiplied his cash by three.

In one of her A3 dojo columns, Tracey mentions her sensei at Toyota tried to get them to see one second waste. To me, that’s the gold standard of the gemba. At CEO level, one second appears ridiculous considering the massive waste that one sees due to misunderstandings or thoughtlessness. Yet, one  second in the standard cycle is where the company meets the operator. One second is within the operators world. And one second per cycle every cycle will add up in real productivity. The CEO and the operator have a topic they can both get involved with, which the bedrock of common trust. The acid test to know whether you are doing what it takes to ensure focus and continuity in your lean transformation is simple: how often does your CEO go to the gemba, and how detailed the wastes he or she can see?

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