Lean Transformation Experience so far Lean Leadership In Healthcare A Perfect Fit for the Chief Engineer Model

Based on the observations and reflections of UMHSs teacher, John Shook

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Jack Billi, M.D. jbilli@umich.edu Michigan Quality System: med.umich.edu/mqs

Lean will work anywhere, but Many companies have tried Not every company is successful, In fact, most arent.
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Why companies fail in lean transformation Narrow definition

tools cost cutting, downsizing, outsourcing Many good companies try to practice kaizen and use various TPS tools. But what is important is having all the elements together as a system. It must be practiced every day in a very consistent manner - not in spurts - in concrete way on the shop floor. -Fujio Cho, Chair of the Board, Toyota

Broader definition
thinking, systematic, holistic entire enterprise, business system
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Lean Transformation Some Lessons Learned

Techniques System
Cherry-picking the tools is not enough The tools comprise a system Focus on the flow of value to create a system A way of thinking underlies the tools and system Learn the thinking through doing
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Lean Enterprise Transformation

Change Culture First Change System First

Thinking

cartoon copyright U of M

Where Do You Start Either? Both at once?

The T hinking Production System

Getting people Best Quality - Lowest Cost - Shortest Lead Time

Through Shortening the Production Flow By Eliminating Waste

From LEAN to LEARN

Arguably what Toyota accomplished in its early days that has enabled it to continue to thrive is simply that it learned to learn. But how can we replicate that?

Just in Time
The right part at the right time in the right amount
Continuous Flow Pull System Takt Time

to think and take initiative Jidoka is the key! BuiltBuilt-in Quality

Automatic Machine Stop Fixed Position Line Stop Error Proofing Visual Control Labor-Machine Efficiency

HEIJUNKA

Production Lines That Stop for Abnormalities

Standardized Work and Kaizen

Mutual Trust; Employee Development Stability; TPM; 5S Robust Products and Processes Supplier Involvement 8

A Look at Leadership at Toyota

The Lean Leader leads:
By

Leadership: Three Models

Ever worked for one of these? Are you one of these??
Older Dictator Style: Do it my way Newer Empowerment Style: Do it your way...

Kaikaku

Dramatic improvements By

Kaizen small improvements

Continuous

It takes a balance of both kinds of leaders to succeed

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Lean Style: Follow me, well figure this out together

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Leadership Lessons from Toyota

Lead the organization as if you have no power.
Kan Higashi to Gary Convis

Leadership at Toyota Responsibility = Authority

I expected bottom-up decision-making. Thats not exactly what I found. I expected a measure of top-down authoritarianism. I didnt exactly find that either. Rather, I found a dynamic system in which processes were usually well-defined and individual responsibility was almost always clear. Authority was rarely an issue emphasis was on doing the right thing, not establishing ones rights (authority).
John Shook

Never tell anyone exactly what to doYou remove the responsibility for the outcome.
Mr Ushikawa to John Shook

Lead by being a consensus-builder

on problems, root causes, strategies, countermeasures, plans
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Chief Engineer: Responsibility without Authority

Prototypical case of responsibility without formal authority: the Toyota Chief Engineer. The Chief Engineer says: I have no authority. Everyone else says: The Chief Engineer is the most powerful person in the company. They are both right. The CE must lead by:
being

Chief Engineer or Shusa System

knowledgeable, often right, fact-driven, an expert negotiator, strong-willed yet flexible, influence/persuasion. Chief Engineer model: helpful in manufacturing; essential in healthcare!
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Body Eng.

Interior Chassis

Elect.

HR
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UMHS Chief Engineer System

What is the HFHS Chief Engineer System?

Med

Surg

Anes

Nursing Pharm
Modified from John Shook 15

Dept 1 Dept 2 Dept 3

Unit A Unit B
Modified from John Shook 16

Leadership at Toyota
The Why? Technique
At Toyota, the burden of proof is clearly on the subordinate to justify why a proposed action is necessary. Managers in Toyota rarely say Yes easily they usually simply ask Why? 1. Why did things go wrong; what is the root cause? 2. Why do you propose that? A huge difference in determining organizational focus. Each justification is rooted in actual practice, in the results of actual activities. This applies to each and every decision, ensuring true organizational learning at every step.

Leadership at Toyota Decision-making Problem-solving

Decision-making and all actions revolve around planning and problem-solving. It is assumed that there will be problems, that nothing will go according to plan. No problem is problem. For the system to work, problems must be exposed and dealt with forthrightly. Hiding problems will undermine the system. Authority is generated by taking responsibility for problems, building consensus on their causes, the strategies to solve them, and each of our roles in the plan18

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Leadership at Toyota Control with Flexibility

Toyotas way provides extraordinary focus, direction, control. No excuses the flip side of no blame While at the same time providing maximum flexibility -Because no one ever tells anyone exactly what to do. Tremendous reliance on individual initiative Yet, no one can move freely without justifying each action to his/her manager. This is a huge difference in determining corporate focus.
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Excuses
Barry Melrose (Canadian Hockey coach): The coachs job is to take excuses away from the player no travel problems, no equipment problems, no bad practices, no bad game plans so that there is nowhere for the player to look but in the mirror.
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Leadership at Toyota P-D-C-A

Toyota would say this is nothing more than the P-D-C-A management cycle they learned from Dr. Deming. Yet, this is precisely the thing that most companies cant seem to do. Why? Surely one major reason for this is the way we lead and manage.
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Lean Leadership
The 1:15,000 Dilemma The Leader as Dictator of the old days tried to tell everyone what to do.
No

transfer, or Cascade of Responsibility

The Empowering Leader of the 80s and 90s just set goals and let everyone do as they pleased. (MBO management by objective)
Loss

of focus, direction, control

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The Lean Leader leads a very different way

By setting the vision (more why than how)
with nemawashi dialogue, Policy Deployment and setting challenging expectations at the individual level

P-D-C-A Cycle
GRASP the SITUATION

By building systems and processes that cascade responsibility

Standard Work, Kanban, Stop-the-Line (Andon), 5S as tools that truly empower HR and HK as broader empowering systems

ADJUST ACTION PLAN CHECK STUDY

HYPOTHESIS

By influence
by example; by being knowledgeable by getting into the messy details by coaching and teaching
through PDCA learning cycles through questioning
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REFLECT

DO

TRY

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The Toyota Way

NUMMI as a Learning Example:

The Business Agreement: Toyota manages the plant and implements the Toyota Production System The Business Case for GM Small profitable car TPS Idle capacity plant and people The Business Case for Toyota: ?? Results:

Best Quality - Lowest Cost - Shortest Lead Time Best Safety - Highest Morale

Continuous Improvement

Respect for People

GM Toyota

?? ??

PDCA Learning Cycles

What can we do??

Toyota is Toyota. We can learn from them, but we try to copy them, but we cant be them exactly (and theyre not perfect, anyway). How can we operationalize the same principles in our own companies?

A System for Operational Learning

What do we know about how people learn?
People learn: Through experience Through mistakes Through trail and error

How can we build structured opportunities for people to learn the way they learn most naturally? P-D-C-A as a model for OPERATIONAL LEARNING

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Problem and PDCA Tools for different levels

Role
PDCA tool: (HK) Policy Management Problem: MURI, MURA

Operational Learning through PDCA Tools

How can we build structured opportunities for people to learn the way they learn most naturally? Structured Process for Operational Learning through PDCA at the individual or micro level: Standardized Work & Kaizen. Structured Processes for Operational Learning through PDCA at the individual, mid-management or system level: Value Stream Mapping and the A3. Structured Process for Operational Learning through PDCA at the broader organizational level: Policy Deployment (Hoshin Kanri). 30

Impact

MUST PROVIDE VISION SENIOR AND INCENTIVE PDCA tool: MANAGEMENT

A3 or VSM

Likes the results

Problem: MURA, MURI

MUST LEAD THE ACTUAL OPERATIONAL CHANGE

MIDDLE MANAGEMENT
Problem: MUDA

PDCA tool: Standardized Work

Requires tools and support to lead Likes the involvement

MUST DO

FRONT LINES

Key to success: The Mid-management and First Line Supervisory Level

HK hoshin kanri policy alignment policy deployment Muri overburden Mura uneven workload Muda waste

Shook

The challenge of any manufacturing business: Matching capability (capacity) with demand MUDA = Waste

System Design to Control the 3 Ms

MURA = Variation, fluctuation

MUDA (Excess)

Capability Demand
MURI (Overburden)

MURI = Overburden 1. Design the system with sufficient capacity to fulfill customer requirements without overburdening people, equipment, or methods. 2. Strive to reduce variation/fluctuation to a bare minimum. 3. Then strive to eliminate sources of waste! Quality first, then cost first stop shipping scrap
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MURA (Instability)

Know your demand Know your true capability (capacity) Create flexibility to enable them to match TIME
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Different Roles at Different Levels

Sr. Mgmt.

System Kaizen
Eliminate Muri and Mura
Middle Mgmt.

Three Keys to Lean Leadership

Go See. Process Kaizen
Eliminate Muda Sr. Mgmt. must spend time on the plant floor.

Ask Why.
Use the Why? technique daily.

Show Respect.
Front Lines

Respect your people.

FOCUS

-Fujio Cho, Chair of the Board, Toyota

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What is Lean?
A true lean system should be: Simple & Practical
Data are of course important,

Go see

Consistently solving real business problems

at each level of the company in each activity of the company in real time at the root cause

but I place greater emphasis on facts.

-Taiichi Ohno

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Best Quality - Lowest Cost - Shortest Lead Time

Mr. Cho: Know normal from abnormal - right now

Detect normal from abnormal right now!

J I T

J I D O K A

Operational Stability and Kaizen

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Lean Enterprise Transformation

Change Culture First Change System First

Lean Transformation
Its easier to act your way to a new way of thinking than to think your way to a new way of acting.

Where Do You Start Either? Both at once?

John Shook
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Appendix
Billis 6 Favorite Slides (What are yours?) The Lean Thinking House (UMHS versions)

We know half the plan is wrong, we dont know which half. We have to watch it unfold, detect normal from abnormal right now, and fix it.

Traditional companies think of a plan - as a prediction of what will happen. Lean companies think of a plan - as an experiment to be conducted - to tell us what we didnt know about the work
Paraphrase of Steven Spear , Fixing Healthcare HBR05

Plans are useless, planning is essential. (Eisenhower)

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A Quick Summary of Lean Thinking

Do our work every day in a standard way that we created
Not just the way the work evolved! They always do! For this patient or co-worker So it never happens again!
Modified after Spear; Billi

Lean Thinking is just

simple and practical, consistently solving real problems in real time, at the source. not jumping to solutions. fixing the problem now. hard on the problem, easy on the people. leader saying, Follow me. Lets look at it together. leading by being knowledgeable, fact-driven, expert negotiator, strong willed (for organizations goals) yet flexible; leading by influence and persuasion. not telling people exactly what to do. having individual responsibility clear. John Shook
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Be alert to things going wrong

Fix the problem now Find and fix the root causes of the problem Solving problems:
1. Go and See 2. Ask why 5 times 3. Respect people Mr. Cho
www.lean.org www.med.umich.edu/mqs

Lean Thinking: Troubleshooting Guide

1. 2. 3. 4. What is the problem? Who owns the problem? What is the plan? What is the current status of the plan? How will it be monitored? 5. What worker training is needed? 6. How does this problem relate to the organizations most important goals?* 7. What leader development is needed?
Adapted from John Shook. Ask questions in order. *As a variation, 6 may be asked second. J Billi
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UMHS Chief Engineer System

Med

Surg

Anes

Nursing Pharm
Modified from John Shook 46

Problem and PDCA Tools for different levels

Role
PDCA tool: Policy Management Problem: MURI, MURA

Impact

Michigan Quality System

Likes the results

MUST PROVIDE VISION SENIOR AND INCENTIVE PDCA tool: MANAGEMENT

A3 or VSM

Problem: MURA, MURI

MUST LEAD THE ACTUAL OPERATIONAL CHANGE

MIDDLE MANAGEMENT
Problem: MUDA

PDCA tool: Standardized Work

Requires tools and support to lead Likes the involvement

Just-In-Time

Built-in Quality

MUST DO

FRONT LINES

Key to success: The Mid-management and First Line Supervisory Level

Muri overburden Mura uneven workload Muda waste

Shook

UMHS Values: Respect, Compassion, Trust, Integrity, Collaboration, Leadership

Overview/MQS Philosophy (All Missions) Sources: J. Shook, J. Billi, J. Liker, S. Hoeft, Park-Nicollet /jmk 04.09.07

Michigan Quality System

Michigan Quality System

Quality Safety Efficiency Appropriateness Service

Safe - Effective - Efficient - Patient-Centered - Timely - Equitable Health Care

Just-in-Time
Using the fewest resources to consistently deliver exactly what the customer needs Leveled Workload

Built-in-Quality
Error-Free

Just-in-Time
Using the fewest resources to consistently deliver appropriate care

Built-in-Quality
Ideal Patient Care Experience Error-Free

Customer Defines Value

Dont Make, Accept, or Send on an Error Standardized Work

Right Care, Right Time, Right Setting Leveled Workload Continuous Improvement (P-D-C-A) and Learning

Dont Make, Accept, or Send on an Error! Standardized Work

Continuous Improvement (P-D-C-A) and Learning

Make Value Flow by Eliminating Errors and Waste

MQS House Master version (All Missions) Sources: J. Shook, J. Billi, J. Liker, S. Hoeft, J. Womack, Park-Nicollet /jmk 04.09.07

Make Value Flow by Eliminating Errors and Waste

MQS House (Clinical Mission) Sources: J. Shook, J. Billi, J. Liker, S. Hoeft, J. Womack, Park-Nicollet /jmk04.09.07

Michigan Quality System

Quality Safety Efficiency Appropriateness Service

Just-in-Time
Pacing by Demand

Built-in-Quality
Error Proof

QUANTITY

Continuous Flow Pull Systems

Customer Defines Value

Surface Problems Stop and Respond to Abnormalities Solve Problems at Root Cause

QUALITY

Leveled Workload
STABILITY
Work Force

Continuous Improvement (P-D-C-A) and Learning

Standardized Work
Materials - Materials Readiness - Supplier involvement

Methods - Robust Processes - Skilled, Capable, Flexible - Organized Workplace (5S) - Engaged, Motivated - Design Work, Solve Problems - Visual Control

Technology and Equipment - Reliable, Tested - Serve People and Processes - Preventive Maintenance -TPM

Make Value Flow By Eliminating Errors and Waste

MQS Methods (All Mission) Sources: J. Shook, J. Billi, J. Liker, S. Hoeft, Park-Nicollet /jmk 04.09..07