In the context of the Toyota Production System, True North has a very concrete and specific meaning, an ideal that transcends any particular business or occupation. True North is not for you to invent, but rather to understand in the context of your business. It will guide your business strategy, but it is not your strategy. And if you follow the True North principles, it will generate terrific business results. But to be clear True North is not a set of results either.  If you understand its meaning, then all of the other pieces of Toyota's system will make sense to you. And if you don't understand it, then the rest of their system won't make any sense to you at all. That's how important it is.

Consider this: At some point, each of us is either a customer or a supplier. We generally think of external customers as the customers, but every downstream process within your company is also a customer. External suppliers are also very important providers -- they're the outside factory that typically accounts for 80% of product cost and, like our employees, can have a really big impact on improvement if we only include them in our TPS efforts. (See Supplier Kaizen for how to do this.) Customers and suppliers are really two sides of the same coin. Like doctor-patient, clerk-customer, machining-assembly, distributor-end user -- we all rely on each other.

Customers and suppliers – internal and/or external - they are the Yin and the Yang of commerce. The customer wants perfect goods and services, and the supplier wants to provide that very same thing. To head in a True North direction, your business perspective must be win-win for the customer and the supplier. 

In any process we say that the customer is first, meaning suppliers need to understand value from the customers' standpoint. For example, as customers, we would ideally have perfect quality and instant delivery of products and services, with absolutely no waste. That's the ideal, and this is True North, independent of your industry or job function.

But in order to approach this ideal for the consumer, we need to do a much better job supporting and developing our providers. Management's commitments to developing this most valuable, creative resource are the other side of the coin.

So that's the big picture. Now, let's break it down into its parts looking at the Yin and Yang of each part.
We’ll start with perfect quality. As consumers, we expect this, and providers will naturally do their best work to deliver it if they in work an environment that supports them. It's just human nature. Who likes to produce defects? No one. When provider quality is not perfect, the customer’s process becomes unstable and unpredictable.
There are two roads that can be taken when defects occur in a process: The traditional response to defects -- a very costly one -- is inspection, sorting, rework or scrap. These words may vary between industries, but they never drive defects to zero. These responses also subject the providers to mindless tasks that don't fix problems but only sweep them under the rug.

On the other hand, in a True North environment, the providers, be they employees or external suppliers, will be challenged to perfect the process through problem-solving and kaizen rather than just inspecting out defects. In this scenario, the consumer is provided real value while the provider is developing his or her ability. Win-win. Providing meaningful work to employees and suppliers, and challenging them to solve problems, is management's first True North goal. This requires drawing a line in the sand for defects: No defect is ever passed to the next process. Quality at the source is essential.

When first considering the idea of never ever passing a defect to the next process, you may be thinking "OMG we'll never ship another product."  But if you refuse to sort and sift through bad material from suppliers, quality will improve. Are your team members spending more time on sorting and rework than production? If so, then you haven’t solved the problems. But if you identify and fix these problems on the spot, you’ll all be problem-solvers. You can start today!

Of course, managers worry about stopping production to fix problems, but they soon learn that this behavior not only increases productivity and quality but also develops the skills and passion of the providers. It's the manager's responsibility to create an environment in which employees not only know where to look for improvement but also feel safe and supported when they identify problems. That's True North too. If the providers feel that reporting problems will affect their personal well-being then the problems are compounded: First the problem is not reported, and second the problem festers with the provider.

What is the solution? Employees must be developed as problem-solvers. They need to be given a basic understanding of problem-solving methods to support their efforts. Employee development through learning and practice is True North too. And the same ideal holds when we're working with external suppliers too.

Here are a couple of more tenets of True North that will create an environment favorable to problem-solving and improvement. First, an explicit and credible promise from management that employees will not lose jobs as a result of participating in improvements is key. While no company can guarantee lifetime employment, we can provide assurances that downsizing is not a planned outcome of improvement. Articulating the opportunities of TPS is management's responsibility. Management must also commit to removing destructive physical and mental stress (also known as Muri) from work. Simply put, employees with fried brains will not make good problem-solvers. If we can't identify and remove stressors, then they become the silent killer of engagement and enthusiasm. If as True North indicates, our employees and suppliers are the most important resources for improvement, then we had best make Muri elimination a top priority too.
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Imagine a flock of geese in migration. For them, the direction is clear and shared. They have, as W. Edwards Deming put it, "constancy of purpose." Leadership will change from time to time along the migration, but the direction – True North - remains constant. Good luck & happy new year!

Reflecting on McGregor’s  X and Y Theories of human motivation,  Shigeo Shingo took the position that each of us by nature has a dual  tendency: sometimes lazy and self-interested, and other times motivated and generous.  Which of these behaviors dominates is directly related to the environment in which we find ourselves – call it culture.   
My personal experience as a manager, and as an employee, has surely confirmed Shingo’s opinion for me.  Dropped into a manufacturing management role in 1986 with NO manufacturing experience, I had the opportunity to experience a quintessential Type X culture.  My predecessor, a man of considerable personal knowledge of the business, had ruled for decades with an iron fist, intolerant of opinions other than his own.   I remember commenting to a friend when I first took over the manufacturing VP job,  “it seems like employees are children and production employees are bad children.”   Transferring from an IT role in a different building to this new world of distrust and muted dissatisfaction was indeed a culture shock for me.   After a short time on the job, my general foreman presented me with a list of employees to “keep an eye on.”  He thought he was being helpful.  “Troublemakers,” he  whispered to me. 

It turns out that a few of the troublemakers became early adopters of a different kind of culture, one where employees would be seen as “the most valuable resource.”  What distinguished these rabble-rousers was that they had refused to be beaten down by the previous regime.  My role as a manager was, in the words of Mr. Shingo, to turn their dissatisfaction (Theory X) into “constructive dissatisfaction” (Theory Y.)  At the time I described the experience as akin to freeing prisoners.  I wasn’t making them participate; I was just asking for their help.   That seemingly simple shift ruffled more than a few feathers in management, a humbling experience I documented in a 2012 post jokingly entitled Lead with Humiliation.  Lean transformation,  I discovered, while difficult for everyone, is hardest for managers. 

So, what does this story have to do with the words “accountability” and “authority”?   In 2006, I had the pleasure of listening to David Mann, author of “Creating a Lean Culture“, deliver a presentation at the Shingo Conference on Leader Standard Work (LSW.)  “A novel concept,” I thought to myself.  “Why not clarify the manager’s role in developing a Lean culture?”    So much effort had already been put into transforming front-line systems, but very little in transforming the management systems for folks who were steering the ship.  In fact, the concept to engage managers by check-listing key culture-changing management activities, caught on in a big way.  Many an organization I visit today has attempted to add LSW to its Lean transformation.  Unfortunately, fifteen years and millions of white boards later, what seemed like a good concept is failing in execution.  Here are my observations. 
   
“Creating a Lean Culture” depicts the Lean management system as comprised of three parts:

1. Visual Controls.  Mann describes a wide variety of devices such as hour-by-hour charts intended to make each process obvious on a real-time basis.  Are we on schedule?  Are there defects?   But very few organizations that I visit have a robust standardized work system for specifying and improving work.   More common is “standard work,” which describes only the sequence of the work, often in generalities.   Whether in a factory or office or operating room, the failure to understand cadence and precise composition of the work creates a very shaky foundation for accountability.   
2. Standard Accountability.  This, for most sites I visit, is the centerpiece of the Lean management system.  Operational status for a work group is summarized periodically and discussed at a brief stand-up meeting.   Impediments to flow are noted and countermeasures are reviewed.  The supervisor of the front line is the owner of the “Tier 1” board and is accountable meet specific KPI’s.   The Tier 1 board is tied  to goals and targets set at a higher-level Tier 2 board, which is owned by the manager.  He or she is accountable for Tier 2.  Finally, at the global level is the Tier 3 board owned by the executive.  This is the principle that enables oversight and alignment of goals and measures.  
   
   Several issues frustrate the effectiveness of Standard Accountability. 

• First, as noted above, workers are often not given a stable, repeatable process to run.  Says Mann, “until you demonstrate an improvement in stability of a process by applying the tools of Lean production, leader standard work comes across as a waste of time, a bureaucratic abstraction without real meaning.”
• Second, inadequate attention is given to actual Kaizen.  Referring to the role of leader standard work, Mann notes, “the journey truly begins in earnest after the production floor has been rearranged, or procedures redefined.” But, if front-line capability to deploy countermeasures to problems has not first been established, then what system is there to manage?   It’s a bit like coaching a baseball team where the players themselves have never played.  We can measure the balls and strikes, but nobody has learned how to bat.  Before accountability, there must be ability. 
• Third, there’s that word “accountability.”  Check out Roget’s Thesaurus for the synonyms:   blame, fault, liability, answerability, responsibility, culpability, chargeability.  Or just listen to the evening news for the connotation of the word.   It’s the equivalent of referring to mistake-proofing as fool-proofing.   In this sense, accountability is more like finger-pointing.  Mr. Shingo condemned the word fool-proofing because it was a Theory X word.  I think if he were alive today, he would also ban the use of word accountability for the same reason.   When our words imply that we must make people do something, we’re perpetuating an archaic Theory X view.  As managers, we should be enabling our employees to develop their capabilities.  We should be authorizing them to master their crafts.  Words mean something.  We should choose them carefully. 
• Finally, the concept of tiered accountability can provide an empowering line of sight to all employees and managers, IF it is sincerely followed by all – and when I see the occasional effective tiered accountability process it underscores the power of true alignment.   More commonly, however, engagement at higher tiers is spotty; accountability in that case flows downhill.   The message at Tier 1 is “S.O.S.”  

3. Leader Standard Work (LSW).  This is the management checklist that keeps everyone practiced with the new way, a thoughtfully constructed list of periodic tasks for executives, managers and supervisors, designed to show visible commitment and support for the new way.  This is the concept that first intrigued me when I listened to David Mann’s presentation in 2006: a reminder to managers to be leaders for change.  My observation over the last decade is that managers who use LSW well soon become practiced and no longer need a checklist.   Unfortunately, many managers create a checklist, but then don’t follow it.  “My day is too unpredictable to use leader standard work,” one manager tells me.  An all too common refrain.  We are asking our employees to embrace change, but we are excused.  It is perhaps no accident that the third edition of Mann’s book, released a decade after the original, adds a full chapter dealing with the challenge to engage management. 

From the foregoing rant, it may seem that I don’t subscribe to concepts put forth in “Creating a Lean Culture”; but in fact, fifteen years after its publication, I continue to believe that if employees have both ability and authority, then the guidance and alignment provided by a Lean management system is imperative. That is Theory Y.  As David Mann reminds us, “Execution is the key to lean management.”   The authority to execute, today as in 2006, rests squarely on the shoulders of executives. 

What is your experience creating a Lean management system?  Can you share a story or observation?  

O.L.D.

Hope to see you all at our 15th annual Northeast LEAN Conference in Hartford, October 23-24.  The topic of engagement – employees and execs – will be a main focus.  Our theme this year, Total Employee Involvement, combines the knowledge and experience of leading practitioners and experts.  Want more information?  Click here.

​A daisy rising from my brick walkway reminded me this morning, that even in the worst environment, there is a chance for growth.  But this kind of individual heroism does not portend success for Lean transformation.  As an organization with the slogan “Everybody Everyday,” GBMP places high value on Total Employee Involvement as an essential piece of continuous improvement.

I have a long-standing practice of asking managers “What percent of your employees come to work every day, excited about a potential solution to a problem or an idea for improvement?”   
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After 20 years in Lean consulting, the answers I receive to that question have not changed much.  Here are a few:
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• “We had a good run for a few months when maybe a third of our workforce was engaged, but we’re probably at about 5% now.”
• “The only serious work on improvement or problem solving comes from our dedicated Kaizen team.” 
• “One company owner, call him John Smith, actually told me during a sales call, “Our employees are morons, so that wouldn’t work here,” a comment sufficiently offensive that I politely excused myself from the meeting: “If that’s how you feel, Mr. Smith, then you’re right, Lean is not an option for you.” 

Fortunately, most responses to my question are kinder than Smith’s, but the percentage estimate for employee involvement is still almost always less than 25%.  If less than one fourth of employees are participating in problem solving or improvement, no wonder so many organizations report lukewarm outcomes from Lean.  You can debate the exact percentages for employee involvement, but all of the estimates and expectations are resignedly low.  

So, what’s missing?  Do we need  better employees as Mr. Smith suggests?  Or are employees like the daisy in my walkway?    Even an awful environment will grow an occasional daisy.   We call those few, the "self-starters", the "A-team", persons who rise above every obstacle to achieve.  And how do we reward them?  We give more challenges to them until they are overwhelmed.  That’s the predominant system. 

So, how do some organizations break through to generate broad employee involvement?   A manager from one Shingo Prize-winning factory related:

 “When we first subscribed to the Shingo insight that systems drive behavior, we realized if employees were not engaged, then perhaps the means by which we encouraged involvement needed to be revised.  That was a humbling eye-opener.  For example, we discovered that our idea system was literally losing employee ideas in the evaluation process.  Employees took this as rejection and just stopped submitting ideas.  They felt disrespected.”

At a deeper level, the willingness of this factory's managers to question the systems that they themselves had created exemplified a couple of fundamental Shingo Principles:

• Lead with humility
• Respect every individual  
  
  

According to the manager from that factory, “the biggest lesson for me personally was how much my behavior affected all of my employees.  These principles have been guideposts for us to create an army of problem solvers.”  Call it a field of daisies.

Are you relying on a few self-starters to create improvement or are you developing an army of involved employees?   Please share your thoughts.    

O.L.D.

BTW – Want to learn more about creating a culture of Total Employee Involvement?  We’ve got a twofer for you. 
First, on October 21-22, we’ll be at Legrand (Wiremold) in Hartford teaching the Shingo Institute’s CULTURAL ENABLERS workshop that describes the fundamental principles of Lead with Humility and Respect Every Individual.  Read more about it here.

Then on October 23-24, the 15th Annual Northeast LEAN Conference will be held at  The Connecticut Convention Center, also in Hartford. The event features 50+ sessions to engage the hearts and minds of our most valuable asset, out employees. Learn about GBMP's biggest event of the year here and register your team today! I sincerely hope to see you there.

GBMP wants to make sure they are so be sure to join us on July 9-10 at Abiomed in Danvers, MA for an excellent 2-day workshop during which students will learn the RIGHT way to use VSM to document material and information flow and get practiced through hands-on activities so they leave the workshop with the knowledge AND CONFIDENCE to use Value Stream Mapping to eliminate waste in your process. Read more/register here.