Put Your People at The Center of Your Development System

Dear Community Member,

My spidey sense was tingling as my host, the GVP of Product Development, explained that “…of course, it goes without saying that people are our most important asset and so we recruit and hire the top people from the best universities and get out of their way.” By the time he shared their only specific example of their people development strategy as an annual training-hours target, full-blown alarm bells started going off. Especially since one of the reasons I was there was because of high attrition levels among technical people.

“Respect for people” in product development starts with not taking your people for granted. It is your people that provide the skills, energy and creativity. They are the single most important element of great product development systems. They drive the system. Yet many companies leave their growth and development to chance. They are far more excited about their newest additive manufacturing equipment or cloud based collaboration tool. What’s more, it seems that the recent startup craze has exacerbated this problem. Companies seem less inclined than ever to make long-term investments in people – and this is indeed a troubling trend. And what may be worse, few product development “experts” seldom even mention people. Having the right people in the right roles with the right skills is “just assumed.” This is a potentially fatal mistake for the long-term viability of your organization. It is the fundamental responsibility of every enterprise and every manager in those organizations to invest in the development of their people.

It was at the beginning of my own lean journey more than two decades ago that two comments about the role of people in lean really resonated with me. The first was when John Shook told me that “Lean is not people agnostic – people are the center of lean and the reason for it.” The second was when Mike Massaki, President of the Toyota Technical Center explained that at Toyota “we develop people and products simultaneously.” What he meant was that at Toyota, people development was not an extracurricular activity delegated to HR. It was at the very center of everything everyone did. It was part of how they did their work every day. And throughout my next three years of research I saw how Toyota leaders coached, mentored and consciously developed some of the best engineers in the industry and turned that development into a truly lasting competitive advantage.

But it wasn’t until I started to apply these lessons as a development leader that I really understood what it meant to put your people at the center of your development system. It fundamentally changed how we approached our work: how we led our design reviews, how we made assignments, the development tools and processes we created, how we thought about “career paths,” and most of all, how we viewed our roles as leaders. And that helped to transform our organization as well as our products.

While a detailed discussion of each of these topics is beyond the scope of this e-letter, I will leave you with one question to reflect on:Where do your people fit into your development system?
– Jim

Jim Morgan
Senior Advisor
Lean Product and Process Development at the Lean Enterprise Institute

PS:

LEI LPPD Open House: Last month, product developers from 22 different organizations packed into the LEI office in Cambridge for our first-ever LPPD Open House. They came from as far away as Rio de Janeiro and Tel Aviv, as well as all across the U.S., and represented industries as diverse as software, microprocessors, undersea exploration equipment, consumer products and healthcare. It was incredible! In addition to a great networking opportunity, we shared several successful case studies that illustrated the potential of LPPD including the excellent work of our learning partner Herman Miller. We are thrilled with the incredible community growth we have experienced in the last year.

LPPD Learning Partner Event: These events continue to be one of the most unique and powerful opportunities for learning as companies share the details of the challenges and success of their LPPD journey and October was no exception.  Our partners currently have experiments underway on effective LPPD management systems for running product development systems, craftsmanship excellence, creating milestone quality of event criteria and visual management. In addition, Sebastian Fixson, Professor at Babson College led an excellent, interactive workshop on “Design Thinking” and Jim Womack shared his perspective on the crucial role of LPPD in creating a Lean Enterprise.  Our partnership continues to grow in both size and effectiveness and has become a benchmark learning process.

LPPDE Conference: September’s LPPDE North America conference in Austin was a hit! Attendance, energy and post-conference feedback were off the charts. Your next chance to engage with the Exchange will be in the U.K. April 25-27, 2016 and in Philadelphia in September 2016.

Death Spirals: Why You Should Embark on a Lean Product Development Journey

Although I do have a reasonable number of years of experience with lean product development, I decided to join Durward Sobek’s Lean PD 101 Introduction workshop when I was at the Lean Product and Process Development Exchange 2015 in Austin, TX. I thought it would be a good idea to take some distance and look at the bigger picture. The workshop brought that, and more.

Interestingly enough, the key learning for me came in the very first block, which, in summary, covered the topic of “Why on earth would I want lean product development?”

In my career as a coach for lean in innovation, this elementary question has popped up many times, and it will continue to do so; for example, when I work in new areas of my company or when new people enter. Although we lean experts sometimes forget about it, being carried away by the beauty of applying lean in an innovative context, it is indeed a very important question.

James Womack taught us why in his famous lean thinking model. The first thing to focus on is defining value. Rightfully, business leaders and development leaders want us to focus on the improvement of business results. They will be hesitant to apply new methods when they do not understand how it will help them to achieve their goals.

In his introductory workshop Durward Sobek presented two cycles, which helped me understand why this is as hard as it is.

durward slides (1)

Everyone in product development recognizes these negative cycles. It can be very difficult to escape from them as they reinforce themselves. Less time to proactively identify and look into possible issues will inevitably lead to more issues that will again absorb valuable time. Virtually every engineer has encountered this feeling of being on a continuous quest to fight problems that wouldn’t exist if they’d just had time to do the job properly.

In air shows, planes sometimes do a trick that is called a “death spiral.” In a death spiral, the airplane drops towards the ground with its nose down, circling around the fuselage axis. This rotation happens because the wings do not have any lift when the plane flies downward. The natural reaction of the pilot would be to push the stick up. If you do so, the plane will only spiral faster and drop faster. You need a counterintuitive reaction to solve the issue: you have to push the stick down, such that the plane gains speed and corrects its position to gain lift.

Death spirals make a great visualization of the negative cycles in product development. Let’s now go back to our hesitant business or development leader. In product development, to escape from the continuous downward cycle of fighting fires you ignited yourself, you’ll need a counterintuitive reaction. In our company (Philips) we like to focus on two of those paradigm shifts:

  1. The shift to focus improvement on the elimination and reduction of the non value added parts (waste) rather than trying to do the value adding part of the work even better.
  2. The shift to “learning first.” Rather than fixing requirements as early as possible; design the product and test it, focusing on identifying and closing knowledge gaps in the front end. Realization can be fault-free and speedy when you take this approach.

After listening to Durward’s story, I suddenly better understood why it is so difficult to sell lean product development. Many of the actions that make up lean PD are counterintuitive, in that managers will not see right away how it will help them to solve their business problems. They will resist taking these actions because of their never-ending lack of time and let other, “more straightforward” solutions prevail. And unfortunately, such solutions are often of the “more water to fight the fire” type, rather than addressing the reasons for the fires starting in the first place.

So what do we have to do when we want to create pull for a lean deployment? We have to show that we really understand the problems. We have to ensure we clearly visualize the death spirals that make the problems persist. From there we can offer the counterintuitive solutions and show how they can make the spiral turn the other way around!

The views expressed in this post do not necessarily represent the views or policies of The Lean Enterprise Institute.

Why Creating Products Customers Actually Want Requires a Great Process

Upwards of 80% of the cost (and hence, waste) is committed for a new product or service by the time product and process designs get locked-in during development before operations even builds one part. Instead, many leaders still choose to focus the majority of their improvement efforts where 80% of the cost is incurred—the operational value stream, post-launch. One can’t help but ask, why don’t organizations focus more creative lean design energy within the product development value stream?

For one organization (let’s call them Acme Devices) that has been working to improve their operations for many years, the cycle of adding value by reducing waste started to resemble squeezing water from a rock. This meant stalled progress. Frequently Acme would get 10-20% operational improvements, but the actions that got them there were difficult to sustain and even harder to further improve. Acme Devices realized that what they originally thought was kaizen (continuous improvement) was really just touzen (correction of a design) and rework around a poorly configured new process.

Why didn’t Acme Devices focus more on lean within process development? Here are the three causes they discovered (unfortunately, these are all too common):

  1. Too Little, Too Late: No upfront process thinking and process design for new products or services before their final design.
  2. Too Much, Too Early: Critical operational decisions are made too soon with incomplete knowledge or inaccurate input and cannot be changed later on.
  3. Penny-Wise, Pound-Foolish: Functional or area decisions are made that may lead to local optimization but frequently lead to overall performance reduction.

productdesignacme

Acme’s Traditional Development System Model

From Waste Reduction to Waste Avoidance (Prevention is the best cure!)

Eventually, Acme Devices managed to move upstream in the product lifecycle to the product development value stream to shift the focus from waste-out to value-in. While it was daunting to know where to begin upstream from operations for lean in development, Acme chose the starting point of process creation for new products. Acme selected two critical new product development programs to pilot upfront process development and design.

After studying the methods of leading lean organizations in automotive, aerospace, and other industries, Acme leaders discovered that successful lean process creation within the development system required the following:

  1. System Architect: Find a System Architect who will be responsible for thinking about the whole value stream and its processes in conjunction with the product design.
  2. Team of Responsible Experts: This System Architect should lead a team of responsible experts who have a mastery of available / emerging technical and operational knowledge.
  3. Repeatable Routine for Creating Lean Processes: This team develops a Lean Process Creation (LPC) methodology that becomes standard engineering work in the “Development Factory” for all new products.
  4. Rapid Learning Cycles: Utilize the Set-Based Concurrent Engineering (SBCE) methods that “test before design” for multiple alternatives before converging to the optimal process design that needs to be configured.

lpc

Following this methodology in pilot areas, Acme realized step-wise improvements to health and safety, first-time quality, value stream lead time, on-time delivery, and cost.

In the past, improvements after launch would have yielded only 10-20% performance gains with substantial resources doing the work. Now, an upfront lean process resulting in them capturing 30-50% gains from initial process concept to final configuration prior to launch. Plus, the process creation teams generated many valuable ideas they could use toward future product and process design enhancements for their next generation product. For the engineering organization, this justified “front-loading” the design resources within the product development system. Acme Devices now had evidence that such an investment was required to launch truly lean processes from the start.

Next time your organization is ready to design a critical new product or add capacity, move upstream with lean process creation. This is a good first step toward meaningful, lasting results and real lean transformation.

Need more help getting started? Read Lean Product and Process Development, 2nd Edition by Allen C. Ward and Durward Sobek.

Mark Reich

Mark Reich is COO of The Lean Enterprise Institute and heads up LEI’s Co-Learning Partnerships Program. Over 23 years at Toyota, Mark held a number of posts in Japan and North America. He was assistant general manager of the corporate strategy division where he managed and implemented Toyota’s North American strategic (hoshin) process, designed jointly with Toyota’s Japan headquarters. As a hands-on general manager of the Toyota Production System Support Center (TSSC), Mark implemented the Toyota Production System (TPS) or managed its implementation in a variety of industries. Mark spent 9 years at TSSC, established by Toyota to share TPS know-how with North American companies. During a busy two-year tenure as GM, he doubled the number of companies supported from 20 to 40. He transitioned TSSC from for-profit to nonprofit status so to better support its original mission to strengthen North American manufacturing and help any organization interested in implementing TPS. Mark also expanded the client base to hospitals, schools, low-income food distribution, and other prominent nonprofits. He is fluent in written and spoken Japanese.

Durward Sobek

Durward Sobek is a faculty member at the Lean Enterprise Institute and a Professor and Program Coordinator of Industrial and Management Systems Engineering at Montana State University. He holds Ph.D. and M.S. degrees in Industrial and Operations Engineering from the University of Michigan, and an A.B. degree in Engineering Sciences from Dartmouth College. Durward has been researching lean product development and lean healthcare for nearly two decades, focusing on how organizations can increase their performance capacity through the application of lean principles. He is co-founder of the not-for-profit Lean Product and Process Development Exchange, Inc. whose mission is to share and expand the body of knowledge around lean product and process development. He is a frequent presenter, and has written published articles in Harvard Business ReviewSloan Management Review, and IEEE Transactions on Engineering Management among other publications. He is co-author of Lean Product and Process Development, 2nd edition with Allen C. Ward; and is co-author of the Shingo Prize winning book Understanding A3 Thinking: A Critical Component of Toyota’s PDCA Management System.

John Drogosz

John Drogosz is a product and process development coach at the Lean Enterprise Institute. John has over 20 years of lean manufacturing, product development and above shop floor experience. As Vice President at Liker Lean Advisors, he has led lean transformations in a number of companies across various industries, including Northrop Grumman, Johnson Controls, Areva, Peugeot-Citroen, Tenneco, Johnson Controls, Eaton, Hertz, Schlumberger, Harley-Davidson, Embraer and Caterpillar.

Dr. Drogosz currently teaches classes in LPPD and lean manufacturing for the College of Engineering at the University of Michigan – Ann Arbor. He is a contributor to the book Toyota Product Development System by James Morgan and Jeffrey Liker, as well as Liker’s book The Toyota Way to Continuous Improvement.

In the past he held a management role in enterprise-wide lean implementation at Delphi Automotive and worked through John Shook’s TWI Network. John holds a Bachelor’s degree in Business Administration from the University of Western Ontario and a Master’s and Ph.D in Industrial and Operations Engineering from the University of Michigan. He is also a Six Sigma Black Belt.

Jim Luckman

Jim Luckman is an Lean Enterprise Institute faculty member and lean coach. He has had the unique experience of leading three separate lean transformations, first as a Plant Manager, then as a Director of a Research and Development Center, and also as a CEO of a small start-up company. Jim is the Past President and CEO of iPower Technologies, a company serving the distributed generation market of electrical power. He has worked in the auto industry for 34 years at Delphi Automotive (formerly part of General Motors). His current efforts include leadership coaching, application of lean in R&D, and lean software development. Jim currently coaches companies interested in company-wide lean transformation. He is a partner in Lean Transformations Group, LLC.

Katrina Appell

Katrina Appell is a Lean Product and Process Development Coach at the Lean Enterprise Institute. She is passionate about supporting organizations in improvement and transformation with 10+ years of coaching, facilitating, training, and team development experience.

Katrina was previously a Senior Lean Consultant at Liker Lean Advisors supporting Caterpillar in lean product and process development and a Lean Coach the University of Michigan Health System. Working with Jeff Liker and Jim Morgan, Katrina’s doctoral research used contingency theory to analyze the effectiveness of different approaches to lean in complex environments through product development case studies.

Dr. Appell has previously taught classes for the College of Engineering at the University of Michigan at Ann Arbor in lean manufacturing, lean-six sigma greenbelt, lean healthcare, lean office, lean supply chain for healthcare, lean supply chain and warehouse management. Katrina has a Ph.D. and M.S.E. in Industrial and Operations Engineering from the University of Michigan at Ann Arbor. She also has a B.S. in General Engineering from the University of Illinois at Urbana-Champaign, where she was previously the President of the Industrial and Enterprise Systems Engineering Alumni and Advisory Board. Katrina is President of Katrina Appell Consulting and organizes her thinking by blogging at appell.org.

Matt Zayko

Matt Zayko has over twenty years of experience in leading lean enterprise improvements in numerous industries by helping them transform product development, engineering, manufacturing, service processes, and operating systems in a variety of staff- and management-level roles under the guidance of former Toyota mentors and sensei.

Currently, Matt works with leading organizations in a wide range of industries including healthcare, service, distribution, and manufacturing, as well as researching and developing lean principles with systems thinking. Matt has authored numerous works based on successful transformation, including articles that have been published in “Journal of Quality Engineering” and “IIE Solutions”, a chapter in the 1998 Shingo-Prize winning book “Becoming Lean”, and white papers for the Lean Enterprise Institute. Matt is also a frequent presenter at conferences related to lean transformation.

After receiving a B.S. from Alma College in Physics and a M.S. from the University of Michigan at Ann Arbor in Industrial & Operations Engineering, Matt worked over a twelve-year period for Chrysler Corporation / University of Michigan, Gelman Sciences, General Motors / Delphi Corporation, and Pall Corporation (now part of Danaher) before affiliating with the Lean Enterprise Institute (LEI). Matt is a long-time faculty member of LEI (www.lean.org), working closely with smaller, entrepreneurial-minded organizations, as well as larger, global companies.

Tim Fisk

Tim Fisk is a lean coach and leader in enterprise and functional transformations. His work focuses on value creation whether it be revenue and cost improvement and/or investment effectiveness and efficiency. Tim helps individuals and teams quickly identify gaps, develop action plans, and collaborate more effectively across separate functions. Tim has worked globally across a wide variety of organizations in strategy and business planning, sales and marketing, product and processs development, and supply chain/operations.

He began his career as a production engineer at Toyota Motor Corporation in Japan 25 years ago, moved on to the Operations Strategy and Effectiveness Practice at McKinsey & Company, and later designed and led Product Development and Enterprise Transformation at Delphi Automotive where he was able to apply his passion: Operating System Design and Transformation. Tim has held leadership positions within Ford Motor Company, ITT Automotive, and SMW Automotive. He holds a BSME from Texas A&M and MBA & Masters of Manufacturing Engineering from the University of Michigan.