5

Three Faces of Change—Kaizen, Kaikaku, and Kakushin

Kaizen—Small change
Kaikaku—Transformation of mind
Kakushin—Innovation

It is not necessary to change. Survival is not mandatory.

—W. Edwards Deming

 

IN A NUTSHELL

Improvement means change. Today more than ever the ability of an organization to change quickly and adapt to changing customer requirements is mandatory. Almost every employee in every organization is faced with the challenge of changing how they do things today into how they want to do things tomorrow. For managers this can be a particularly daunting challenge. When discussing process improvement projects with managers, the LSS practitioner will often be faced with a barrage of “resistance to change challenges” across the organization. We hear statements such as:

  • If only purchasing would do this or engineering would do that, our process could be improved.
  • If this department would consider our needs, we would more effectively be able to deliver our product.
  • If John’s department could just deliver the materials that we need on time, our productivity would greatly improve.

These resistance-to-change scenarios are commonplace in many organizations today. This chapter is about gaining a better understanding of why there is so much resistance to change. How can successfully applying Kaizen to our change management activities be a fundamental approach to overcome this resistance? All LSS change management activities benefit from this approach, whether you are using a process change model of Define, Measure, Analyze, Improve, and Control (DMAIC) or a design changes model using Define, Measure, Analyze, Design, and Verify (DMADV). We discuss how individual and organizational beliefs and behaviors are responsible for some of the resistance to change that we encounter.

If we are to become true LSS practitioners, we need to gain a basic understanding of the ninth waste, behavior waste, and how we apply Kaizen to eliminate this and other wastes and facilitate change in our organization. The ninth waste, behavior waste, teaches us that change and improvement begin with us as individuals (personal waste) and collectively (people waste) as members of an organization. In this chapter we discuss the organizational path of change from a non-LSS environment to an LSS environment. The primary conduit of change management is Kaizen. Eliminating non-Lean beliefs and behaviors across the organization requires the sustained application of Kaizen.

Most organizations are familiar with Kaizen (“small continuous”) changes; however, Kaikaku (“a transformation of mind”), which demonstrates large change or radical change, and Kakushin (“innovation”) are equally important in your Lean transformation.

Kaizen* is not a new concept. It was coined in 1986 by Masaaki Imai in Kaizen—The Key to Japan’s Competitive Success. This first book on Kaizen fully defines and describes the concept. One unique aspect of this book is that it gives us a look at how to apply Kaizen in a traditional organization. Coupled with his second book, Gemba Kaizen, they represent powerful resources on change and process improvement available today. Concepts summarized and presented in this chapter are derived from these and other resources.

Kaizen is the lifeblood of a Lean organization and a Lean management system. It can be used individually, in teams, or for process troubleshooting. We show in this chapter that Kaizen is about taking positive action. Kaizen transitions into Kaikaku, a transformation of mind, and becomes the perfect conduit to deploy education, beliefs, and apply Lean tools across your organization.

The beauty and power of Kaizen, Kaikaku, and Kakushin is that they are easy concepts to learn, implement, and teach to others. Kaizen can become contagious (in a very positive sense) in your organization. You can always tell an organization that practices Kaizen within a few minutes of walking around the facility. The telltale signs are everywhere; there are visual controls and measurement systems. Kaikaku can be described as a series of Kaizen activities completed together, forming and exhibiting the presence of a Lean mindset. Kakushin or innovation is required for growth of all companies. Simply put, living the three faces of change— Kaizen, Kaikaku, and Kakushin—will show you how Lean can transform your organization.

 

INTRODUCTION

Kaizen means continuous improvement or change + improve. Many of us as managers want improvement, but often fear change. We embrace change only if we can completely control it. In many instances, management today wants to know the exact outcome of change before it allows any employee to take even the most fundamental steps to improve a bad situation. We have exposed individual and organizational beliefs as the root cause of this type of employee behavior, and now will present the change management required to eliminate it.

We present Kaizen, Kaikaku, and Kakushin here as the three fundamental tools to deploy change in your organization. What is the nature of change? How do we let go of old beliefs and behaviors? What are we changing into? How does Kaizen, Kaikaku, or Kakushin solve or address all these change questions?

It’s time for individuals, teams, management at all levels, and employees in all functional areas of the organization to embrace change and to become the change that we want to see in the organization. In the words of Mahatma Gandhi: “We must become the change we want to see.”

This means that we cannot look outward for change. We cannot stand and say that it’s the outside world that needs to change—some other employee, department, function, policy, or procedure that needs altering. Every individual in every organization can change aspects of many activities that touch their daily work environment. So let’s start on our journey of Kaizen. We will never be the same, and neither will the organization.

Resistance to Change

Organizational change is often more difficult than it first appears. Why is individual change so difficult? What is it that makes organizational change so difficult? These are fundamental questions that must be at the forefront of any LSS transformation process.

There are three fundamental aspects that prevent, hinder, or inhibit employees from participating in change management. First, there is fear of the unknown. Second is the measurement system. Finally, there are individual beliefs and collective organizational beliefs that present resistance barriers.

Fear of the Unknown

When we say fear, we don’t necessarily mean fear of retribution from a manager or another employee in the organization. What employees typically fear is the unknown associated with any change to their environment. The change from where they are now and what they are familiar with to where the organization is going can cause trepidation on the part of many employees. Often changes are not clearly or completely defined. When there is uncertainty, people may be hesitant to walk into the unknown. Addressing this employee fear is a component of any successful LSS organization.

Measurement Systems

It has often been said that measures drive behavior and bad measures drive bad behavior, or non-Lean measures drive non-Lean behavior. In either event, the measurement system can be a significant source of resistance among employees, departments, or divisions of the organization. When embarking on any LSS project, understanding the nature of the measurement system that’s in place is a critical factor to the success of the project. A review of measures may help in the formulation of your LSS project. Some types of measures that should be considered include:

  • Individual employee performance measures
  • Department measures
  • Division measures
  • Bonus performance measures
  • Process measures
  • Productivity measures
  • Customer-related performance measures
  • Cost measures
  • Corporate measures
  • Stakeholder measures
  • Regulatory agency measures
  • Government regulation measures
  • Risk management measures
  • Liability measures
  • Contract measures

Whether the ability to change these measures is real or just perceived, the above list can have a substantial influence on the resistance to change that you face on your LSS project. Clearly, many of those described can deter an employee on an LSS team from taking action.

Beliefs

Human beings have a fundamental desire to feel that the actions they are taking every day are correct. These actions are derived from each individual’s beliefs. We normally don’t look at ourselves as individuals who are deliberately doing something that is wrong. We generally believe that our behaviors and actions are “the right thing to do.” Because of this, people tend to hold on to their beliefs and behaviors tightly, making it difficult to change a behavior pattern that is not producing effective performance of the organization.

 

OVERCOMING RESISTANCE TO CHANGE

Overcoming resistance to change is rarely easy and can range from a difficult task to a nearly impossible one. People tend to hold on to their beliefs fairly tightly. Many LSS efforts are stalled or fail outright because of the inability to overcome resistance to change.

There is a wide range of excellent literature on the subject of change management. Some focus on managerial psychology, while others use various tools and techniques, and still others present a combination of the two approaches. In this section we introduce the three basic phases that employees typically go through during the implementation of LSS concepts and tools for effective results.

Leaving Old Beliefs Behind

There are three distinct phases required to rewrite our beliefs in successfully transitioning to a new set of daily beliefs and behaviors. The first is to adopt the ability to “let go”* of our old beliefs to which we hold on to so tightly. The second is to open up our mind to the possibility of new ways of thinking and new ways of looking at the daily activities that we conduct. During this period of receptive activity to new ideas, it is incumbent that we try to implement these ideas in new ways in our organization. Over time, these new ideas become new patterns of behavior that become dominant; this third phase is identified as the emergence of an LSS environment.

So how do we leave our old beliefs behind? What is the first step? One of the fundamental characteristics of operating in an LSS environment is the ability of its employees to challenge current beliefs and practices. These may be individual beliefs or organizational beliefs. Initially, this must start with the individual, who on a daily basis must become proficient at questioning whether or not the activities that he or she will be conducting today are creating value for the customer. When this practice becomes commonplace with individuals within our organization, we will be well on our way to developing the discipline to change old non-Lean beliefs.

Only when we have begun to adopt the concept of changing old beliefs can we even consider the possibilities of adopting a different way of doing things. Many companies today run into significant problems with adopting LSS concepts and tools simply because they are unwilling to change old beliefs. LSS is not a concept that can simply be slapped on top of an old belief system, deployed in a vacuum, and be successful. Trying to adopt LSS without letting go of old beliefs is a mistake made by many organizations today, and one of the leading reasons why many LSS initiatives do not produce the results anticipated and are unsustainable.

Considering New Possibilities

Considering new possibilities is a fundamental activity of Kaizen and the essence of this chapter. When we consider new possibilities, we open ourselves up to trying new things and begin to examine the way we think, our point of view, and the methods we use in daily activities. Developing an organizational personality that considers new possibilities is the essence of LSS in that it allows a “learning environment” to emerge.

The identification and development of new possibilities is neither quick nor easy. It requires dedication at all levels of the organization and a commitment to practice Kaizen on a daily basis. Employees must be allowed the elbow room to experiment with try-storms to gauge the relative success of possible new improvements. They must be allowed the opportunity to make mistakes, course correct, and define better paths to higher productivity.

Management’s insistence on a “results-only focus” can stifle the creativity of employees to try new process focus concepts. In this respect, Lean management becomes critical in the development of new processes. The rewriting of our beliefs requires an acknowledgment by management that our current belief system is ineffective and necessitates a deliberate management approach that supports the elimination of old beliefs followed by the consideration of new LSS beliefs.

Emergence of LSS

The continued practice of these two fundamental phases—leaving old beliefs behind and considering new possibilities—results in the emergence of an environment where individuals, groups, and your organization as a whole are on a journey to an LSS environment.

When considering change, start small and follow these simple steps. First, identify a waste in your organization and the old belief that contributed to the production of that waste. Second, put the old belief aside and consider new possibilities. Follow the three faces of change to become an LSS organization.

 

THREE FACES OF CHANGE

There are three faces of change that all improvement activities can be classified as: Kaizen, Kaikaku, and Kakushin. The fundamentals of each are presented in this section. True LSS organizations have employees well versed in all three, and activities of all three types of change management are visible across the organization.

Kaizen—Continuous Improvement

What is Kaizen? Kaizen has been defined many ways. Several definitions follow to give you a range of interpretations of the term Kaizen.

  1. Kaizen: Change + improve.
  2. Kai: To take apart and make new. Zen: To think or become enlightened.
  3. Kaizen: Continuous improvement using small incremental changes.
  4. Kaizen: When applied to the workplace means continuous improvement involving everyone, managers and workers alike.

In Lean organizations, management has two roles—maintenance and improvement.* Maintenance means to standardize and sustain a process, while improvement means to move the process forward to higher levels of performance. Virtually all process improvement programs start with Standardize-Do-Check-Act (SDCA) and move to Plan-Do-Check-Act (PDCA). Figure 5.1 shows this progression.

Kaizen process means to establish and live the PDCA cycle (see Figure 5.2):

  • Plan: Establish a target for improvement.
  • Do: Implement the plan.
  • Check: Determine whether implementation has brought planned improvement.
  • Act: Perform and standardize the new procedures to prevent recurrence of the original problem.
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FIGURE 5.1

SDCA and PDCA cycles.

Where to start Kaizen? If you are not sure where to start Kaizen in your organization, use the four K’s of Kaizen; observe your organization, and start with one of the following:

  • Kusai: Things that smell bad.
  • Kitsui: Things that are hard to do or are in dark areas.
  • Kitanai: Things that are dirty.
  • Kiken: Things that are dangerous.

How do you use Kaizen? There are three basic approaches to using Kaizen effectively: Kaizen and you method, Kaizen for process troubleshooting, and Kaizen teams. Each is briefly described below.

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FIGURE 5.2

Implementing SDCA and PDCA cycles.

Kaizen and You Method

Kaizen is change + improve. That means making simple small incremental improvements that any employee can complete. That’s all there is to it. With the Kaizen and you method each employee can begin today to “change your point of view,” “change the way you work,” and “change the way you think.” How can you start Kaizen today in your work area?

  • Stop doing unnecessary things.
  • Reduce: If you can’t stop, reduce them somehow.
  • Change: Try another way.

There are three laws that make the simple concept of Kaizen work, but you absolutely have to do all three or you will never be good at Kaizen.

  1. Surface: Write the idea down.
  2. Implement: You make the change.
  3. Share: Post it, review it, and talk about it.

With Kaizen you can change yourself and you can change your workplace. Kaizen should be done to benefit you. The person who gains the most from the Kaizen is the person who does the Kaizen. Start doing Kaizen today!

Kaizen for Process Troubleshooting

Everyone in your organization should completely understand and be able to successfully complete Kaizen using the following five-step process.* Employees who cannot complete this process cannot improve their individual areas, and consequently, you cannot improve the organization.

  • Step 1: When a problem (abnormality) arises, first, go to Gemba.
  • Step 2: Check the Gembutsu (relevant objects surrounding the problem).
  • Step 3: Take temporary countermeasures “on the spot.”
  • Step 4: Find the root cause(s).
  • Step 5: Standardize to prevent recurrence.
Step 1: Go to Gemba

Gemba is the most important place in your company. It is where all of the value is created for your customers. This concept was so important that Soichiro Honda, founder of Honda Motor Company, did not have a president’s office. He was always found somewhere in Gemba. Gemba means the “real place,” or where the “action” is. When a problem arises, go to Gemba first and look to solve specific problems.

Step 2: Conduct Gembutsu

Gembutsu means to assess all the relevant information in Gemba that surrounds the problem. Interview several employees; ask questions of what was happening when the problem occurred. Seek information in a nonthreatening way; the employees in the area want the problem to be resolved as much as you do. Don’t place blame, insinuate wrongdoing, or belittle an employee’s work performance. This is a search for the facts of what happened. Remember to gather information regarding all 5M’s: materials, machinery, manpower, measurements, and methods.

Step 3: Take Temporary Countermeasures “on the Spot”

There is nothing more reassuring to an employee than knowing that management will support employees when problems arise. This is best demonstrated by a manager that takes sound action immediately. Your ability to remain calm in a critical situation and gather relevant information, understand the situation, and take action on the spot is one sign of good leadership and will be respected by all employees. Most importantly, it should be recognized by all, especially management, that these are temporary measures. The most common mistake is that organizations stop here at step 3; they never find the root causes, and consequently the organization lives with many “band aid” solutions that never get resolved and result in constant nagging poor-quality and poor-performance issues.

Step 4: Find Root Causes

Once temporary measures are in place, root cause analysis must be conducted. It is imperative that the root causes are found and eliminated. These can be conducted using techniques such as the five whys, cause-and-effect analysis, or failure mode and effects analysis (FMEA). This is a critical step, for if the root cause(s) is not found, the organization is doomed to repeatedly revisit the problem.

Step 5: Standardize to Prevent Recurrence

Standardize means to put in a control system to prevent the problem from appearing again. Depending on the nature of the problem, this often requires management tools such as a revised maintenance schedule, revised standard operation procedures or visual work instructions, or process control charts. These preventative measures must be reviewed regularly to assure that the problem has been eliminated. During standardize you must:

  • Eliminate root causes
  • Implement a permanent solution
  • Confirm the effectiveness of the permanent solution
  • Standardize the use of the new procedure

Kaizen Teams

Kaizen events that are conducted with cross-functional teams are powerful tools for process improvement. They allow the creativity of staff from across the organization to take a fresh objective look at where the organization stands. These teams often readily identify dozens of roadblocks and opportunities for improvement (OFIs). Teams working together inevitably generate ideas that do not arise in the normal daily operation.

A startling statistic that brings home the difference between Lean organizations and traditional organizations is the concept of idea generation. Typical American companies generate only 0.5 ideas per worker per year.* Typical Japanese companies generate nine ideas per employee per year. Toyota generates 70 improvement ideas per worker per year!

Possible Target Areas for Kaizen Teams

  • Customer service—can be improved
  • Quality—can be improved
  • Costs—can be lowered
  • Schedule—improve delivery and production time
  • Cycle time, setup time—can be reduced
  • Inventory—reduce the unnecessary stock
  • Safety—reduce possible accidents
  • People—improve workers’ skills and knowledge
  • Equipment—improve downtime and efficiency
  • Environment—improve air quality, reduce odors
  • Visual—use colors, clean up, find things easier
  • Location—reduce unnecessary motion or facilitate necessary interaction, etc.

Preparing for Kaizen

Preparing for a Kaizen event is almost more important than the event itself. Many events have failed to achieve results anticipated due to poor preparation. This can lead both management and staff to lose faith in an incredibly valuable tool. The basics of preparing for Kaizen include:

  • Management selects target area: This should not be too broad or too narrowly focused. The examples above give some great topics for Kaizen.
  • Set time: Two to five-day Kaizen events are typical. These can be followed by 6 to 8 weeks of continuous improvement team meetings to complete solutions implementations before disbanding the team and re-forming to attack another topic.
  • Set scope or project boundaries: The team needs to know what’s included and what’s off limits. This helps to keep focus and achieve better results.
  • Select Kaizen team members (4 to 6 cross-functional): These should include 1 to 2 employees from the target area, suppliers and customers of the target area. For example, a Kaizen in manufacturing may want to include someone from order processing (supplier) and distribution (customer). Teams should also include at least two outsiders from different departments or functional areas.
  • Objective “eyes” assigned to project: This is typically an external consultant, but can be an internal source if there is a highly trained LSS practitioner on staff. One of the many advantages of using an external source is the wealth of project implementations he or she typically brings to your organization. Another is mentoring of team members during the event. Perhaps the most important role of an external consultant is the ability of the external person to expose sensitive weaknesses that employees may be reluctant to point out.

Team Member Roles in Kaizen

Each team member’s role is to work synergistically with other team members to improve the target area. When conducted correctly, Kaizen becomes contagious. It is the constant doing and sharing of Kaizen results that stimulates others to do Kaizen! Team members should remember to:

  • Participate
  • Study the process in the target area
  • Use creativity before capital
  • Use Kaizen
  • Share ideas
  • Ask questions
  • Experiment with changes

Overcoming Obstacles during Kaizen

The “we can’t” syndrome is the common outcry of employees in traditional organizations. The list of reasons the authors have personally been given why Kaizen won’t work in a particular organization is staggering. Once you begin your journey to becoming an LSS practitioner, you immediately realize how ridiculous all the following assertions are:

  • We produce such a variety of products.
  • Our products are custom; we can’t standardize.
  • The change is too rapid.
  • We are not in a mass production situation.
  • Our people are too busy.

Some reasons for not conducting process improvement reach a level of absurdity that is difficult to comprehend. Let us share a true story with you that one of the authors experienced. Several years ago we were conducting a process improvement program in a traditional organization with a management philosophy similar to the Theory X philosophy. The management team was tremendously cost driven in every aspect of their organization. One of our opportunities for improvement surfaced the need for additional employee training and cross-training. It was readily apparent to the entire team that employees at this organization were in dire need of training and cross-training. However, the very thought of spending money, time, energy, and effort on training and cross-training was out of the question for senior management. Management’s response to the team was: “If we train them, they will leave the company.”

From our perspective this was understandable since it was blatantly obvious that senior managers were living one of the traditional belief philosophies of “low pay, high turnover.” So as to not be too confrontational, we posed a question to management. “Is there anything that you can think of that would be worse than trained employees leaving your company?” There was a puzzled look on some faces as they were struggling to comprehend the question; clearly, it hadn’t dawned on them that anything could be worse. After a few moments of silence, my response was, “The only thing worse than trained employees leaving the company is untrained employees that stay with the company.”

Needless to say, process improvement programs didn’t get very far in that organization. Senior management held closely to their belief and completed nothing but the bare essentials of employee training. Even in the face of poor product quality and poor customer satisfaction they were unwilling to change their beliefs and prepare their staff to deliver what the customer wanted. This is a message to all managers in all organizations that “beliefs drive behavior.” Work daily on developing your LSS belief system.

So, whenever you are faced with the employee response “we can’t” change for any reason, use the following response: “I know we can’t do this because …, but if we could, how would we …?”

People sometimes fear change. I have been asked on several occasions, What if the Kaizen doesn’t work? The answer is simple: Do Kaizen again! Yeah, but what if it still doesn’t work? If it still doesn’t work, do Kaizen again! What if a problem develops from a Kaizen? Do another Kaizen until the problem goes away! You need to conduct Kaizen until you reach a point where you have faith and have lost your fear of taking improvement actions. That is when you know that you are a change agent, a true LSS practitioner. (See Figure 5.3.)

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FIGURE 5.3

Ten attributes of Kaizen.

 

KAIKAKU—TRANSFORMATION OF MIND

Similar to Kaizen, Kaikaku has been defined in many ways. Several definitions follow to give you a range of interpretations of the term Kaikaku.*

  1. Kaikaku: Change + radical.
  2. Kai: To take apart and make new. Kaku: Radically alter.
  3. Kaikaku: Transformation of mind.
  4. Kaikaku: Can also mean innovation, although the authors will discuss innovation later in this chapter as Kakushin.

How Do We Recognize Kaikaku (Transformation of Mind)?

Kaikaku is the result of successive Lean learning and Lean doing until Lean becomes a part of you. Looking back, I am not even sure when it first occurred in me. One day I was training in an organization when it became clear to me that my mind was completely rewired with Lean beliefs and behaviors. Since that day I have been on a mission to help employees at all levels transition from a traditional belief system to a Lean belief system.

In Kaizen we talked about small incremental changes. Many of the tools presented in this handbook are used in Kaizen. Some, however, are tailored to Kaikaku in that they require a more complex set of activities, a more comprehensive set of Lean beliefs and behaviors, or simply put, a “transformation of mind” has taken place in order to properly deploy the Lean tool. This entire handbook is about trying to bring about this transformation of mind in all your employees.

The misconception of management in most Western companies is that Lean is just a set of tools. Management and employees learn a few Lean tools, conduct some Kaizen, and believe that their organization is Lean. Until the transformation of mind has occurred in employees at all levels, your organization cannot reap the true benefits of Lean.

It is only when an employee reaches a significant point in the Lean journey that he/she begins to recognize Kaikaku in himself or herself. Their own personal transformation of mind from traditional beliefs to Lean beliefs is occurring on a daily basis. Those in your organization still practicing traditional beliefs will neither recognize your efforts nor consider them to have any value. Do not let this deter you. You must continue on your journey and help them to see and live Lean beliefs and behaviors. Two examples of Lean tools that can reflect the presence of Kaikaku are cell design and facility layout.

Kaikaku in Cell Design

Let’s consider the five steps of cell design and some of the changes that have to occur in order to successfully implement a cell. Many changes to traditional beliefs about materials, people deployment, equipment, and methods of production need to be considered and include:

  • Grouping similar products
  • Looking at customer demand and understanding how it changes
  • Calculating customer demand
  • Redeploying people in nontraditional roles (to meet customer demand, not fill a functional job description)
  • Changing the number of people as needed
  • Placing equipment to allow continuous materials flow during the value-add process
  • Connecting the signals that initiate flow of materials to customer demand
  • Using POUS for materials and equipment whenever possible
  • Using quality at the source
  • Creating visual work instructions

Individually each of these attribute changes may not appear too significant; however, collectively they represent a radical change or transformation of mind. The Kaikaku case summary of a composite U-cell in Figure 5.4 (discussed in detail in Chapter 4) demonstrates how this transformation of mind occurs collectively for a large number of employees working together in a cell.

Kaikaku in Facility Layouts

Over the years we’ve heard many managers touting that they were implementing a Lean layout. However, if we take a closer look at these facilities, we find that few Lean tools had been successfully incorporated into the process. A true Lean facility layout requires that Kaikaku is present. Even more so than a single cell, an entire Lean facility layout is comprised of hundreds of considerations. The most important aspect is to begin with customer demand and configure your facility to respond to what your customer wants. Some of the major considerations are:

  • Assessing build to order and build to stock products
  • Creating a mixed-model pull system
  • Order processing
  • Purchasing practices
  • Inventory control
  • All production activities
  • Equipment layout
  • Materials placement and POUS
  • Employee deployment
  • Distribution

One approach when considering a new facility layout is to complete a walk-through Lean layout. Figure 5.5 shows the results of a Lean facility layout project. Using only blue painter’s tape and wood pallets, the team created a functional facility layout. The objective of the project was to produce a Lean layout design that allowed senior management to “walk through” the facility prior to any equipment or material delivery and physically see how the facility would operate in the new Lean mixed-model pull system. Locations for everything were identified on the facility floor. This included raw materials POUS, all equipment, materials motion through the facility, employee deployment, production personnel offices, finished goods inventory, and ground, less than truckload and truckload distribution. From this simple layout we could show management how materials would be received, where POUS storage would be, how orders would be processed on the floor, how employees would be deployed, electrical and other utilities considerations, and how order fulfillment would occur for distribution.

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FIGURE 5.4A

Kaikaku case study summary.

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FIGURE 5.4B

Proposed hydraulics and chassis U-cell layout.

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FIGURE 5.5

New facility layout—walk-through design process.

Both of the above examples require a transformation of Mind to complete effectively. How we think about materials handling, employee deployment, equipment utilization, and adding value for the customer all must be radically changed from those of a traditional organization. They require the adoption of so many small changes that at this point the organization has undergone a radical change in beliefs and about how value is created for the customer. At this point the mental transformation has occurred and you are operating as a Lean organization.

 

KAKUSHIN (INNOVATION)

Virtually all process improvement requires some form of change that could be described as innovation, or at a minimum, creativity. In this section we look at innovation as a process in and of itself. As such, it can be defined, described, and managed like any other process. In the remainder of this section we present the 20-20 innovation process.

The 20-20 Innovation Process

Organizations are focusing on innovation as the necessary skill for revenue growth in that most corporations have pretty much exhausted the opportunities for restructuring and re-engineering. The new strategic mantra is revenue growth resulting from four primary strategies: (1) geographic expansion; (2) alliances, acquisitions, and mergers; (3) greater market penetration; and (4) product development and enhancement. And product development and enhancement ultimately depend upon product development as their foundation. Market penetration literally depends upon marketing innovation for its success, with product development and enhancement, along with cost advantages, contributing greatly. To obtain cost advantages, an organization also depends upon innovation, as process design and continuous improvement are process innovation activities. Finally, the related process of management innovation is an untapped resource that can help organizations improve the value that they add to the value chain of key organizational processes. (See Figure 5.6.)

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FIGURE 5.6

The 20-20 innovation process model.

To compete, organizations either attempt to differentiate themselves from their competition or attempt to achieve some relative low-cost position, and in both cases, innovation is the key. The journey from novice to expert in any field begins by understanding these essentials, practicing them, mastering them at one level, and then moving on toward the limits of your potential. At some point in the process, the best innovators rise above their profession in a multidisciplinary manner.

Each of the six essentials of the 20-20 innovation process represents a bundle of habits, skills, and knowledge that come together in innovation-driven problem-solving personalities, and each personality draws its strengths from a variety of specialties. A select number have been identified and mapped against the six essentials as a basic guide to the interdisciplinary skill set, as shown in Table 5.1.

These six personalities serve as an effective way to assess yourself and your organization, so that you can determine what your strengths and weaknesses are and how to assemble a complete innovation and problem-solving capability. This approach should be considered a guide, not a magic formula, in that each individual and organization has a unique mixture of these skill sets that we use to feed into our “Knowledge Wizard.” Some are intensively focused on one or two of these skill sets, and others have a broader blend—the greater the blend, the higher the probability of success. In other words, the better you get to know them, the better innovator and problem solver you will become. Great innovators know their strengths and weaknesses; they build teams to compensate for the weaknesses and create wholes that are synergistic in that they are greater than the sum of their individual parts.

TABLE 5.1

Six Essentials of the 20-20 Innovation Process

Six Essentials of Innovation Essential Description Related Innovation Personality Personality Description (likely professional source of knowledge and skill)
1. Generate the mindset Creating organizations and teams that are innovative, creative, and decisive The innovator Visionary, designer, entrepreneur, artist, counselor, spiritual leader, poet
2. Know the territory Acquiring and absorbing strategic knowledge on a continuous basis The discoverer Historian, scientist, researcher, journalist, investigator, teacher, accountant
3. Build the relationships Building loyalty and trust by exchanging and delivering value The communicator Politician, social worker, civil servant or leader, legislator, publicist, salesperson, agent
4. Manage the journeys Picking the right projects to work on, for the right reasons, at the right time, with the right tools The playmaker Commander, executive, physician, consultant, judge, coach
5. Create the solutions Designing the best end-to-end solutions that are complete and well supported The creator Builder, architect, engineer, inventor, investor, author, trader
6. Deliver the results Implementing solutions that are effective for complex and competitive situations The performer Athlete, attorney, entertainer, musician, nurse, customer representative

At its basic fundamental level, all competition in some way relies upon innovation and creativity. There are six essential innovation and problem-solving skills that apply to any type of innovation or opportunity. The difference between the best and the worst innovators and problem solvers lies in how many of these skills they can marshal by themselves and with others, and how deeply the skills are understood, both individually and collectively. Poor innovators understand them incompletely, and therefore cannot develop an effective and complete capability. Great innovators and problem solvers know them well enough to pull together and manage all six, or exhibit one in great depth, as part of a team. The following outlines in more detail the six essentials of the innovation process:

  • Essential 1: Generate the innovation mindset. Identify opportunities and potent ideas and attitudes for success and create a strategy for various alternative points of view, while defining the program expectations and metrics. This will improve your organization’s effectiveness in moving creatively through the process and related problem-solving effort.

    The innovator’s mindset and central idea is that the best innovation comes from taking alternative points of view. They have a unique and flexible way of seeing things, and thus the ability to both develop original viewpoints and incorporate those of others around them, which are the roots of both creativity and objectivity. The innovator’s journey is the sum of many different points of view. Tapping into these alternate perspectives of both ourselves and others, then testing them and choosing the most valuable, requires sustaining a flexible viewpoint through further inquiry. Our innovation quotient questionnaire helps to integrate these perspectives in new ways, which constitute the powerful mindset of the Innovator.

    The components of this first phase of developing the mindset are: (1) developing potent ideas and attitudes using a project scope sheet, (2) turning problems into opportunities using the IQ assessment, (3) committing to the challenge, (4) creating strength out of weakness and vulnerability, (5) not settling for half-measures, and (6) transcending the limits.

  • Essential 2: Know the territory. This stage concentrates on moving from innovation to insight by asking the right questions and obtaining sound and timely information and data. It also involves the collection and analysis of the system’s past (using the Knowledge Wizard).* Better knowledge helps organizations define the opportunities and problems more effectively, choose the better pathways, and clearly identify what’s at stake. The discoverer’s skill set helps to answer the following:
    • At this stage, we simply don’t know enough to define the opportunity or problem well, so why don’t we step back and answer some key unknowns before we proceed any further?
    • Although we may have a seemingly well-structured proposal, what have we really learned from our past mistakes in that area?
    • How can we avoid an unworkable journey or one that creates unnecessary risk?

    The discovery process and knowledge of the territory brings insight and understanding, which often reveal the most likely problems and opportunities in the context of higher relief. By performing more investigation, the implications become more apparent as a foundation for action. Without this essential, the innovator may choose an unworkable journey or one that creates unnecessary risks. We need to remember that knowledge is the key asset of our day and age. Knowing the territory, the work of the discoverer using the Knowledge Wizard (KW) deals with acquiring the right information about the critical elements of the environment that we are solving problems in.

  • Essential 3: Build the relationships. This stage involves the basics of how to move from isight to relationship building by cultivating quality communications and interaction, so that we can create an ever-expanding circle based upon service, identity, and loyalty. It gives your organization the support and human context that is needed to effectively create and foster innovation and implement change. Good communicators probe the functions and contradictions to ask whether ideas and opportunities are really worth it:
    • What will our customers and stakeholders think about this? Will our efforts add value and build loyalty?
    • Are these opportunities going to threaten some of our best business relationships in the process, and are they really worth it?
    • How will the people be affected by the opportunities?

    Through the mastery of relationship building, good communicators connect potential journeys to their actual implications and contradictions for real people, in order to help determine whether the innovation or problem solving is worthwhile, for whom, and why. Then they generate a core group that will tackle the journey, along with a virtual network that will support the effort. The support network is key, as this is not a one-person brainstorm. Without this essential, there may be no compelling reason to innovate and solve the problem at all. Or worse yet, there may be a reason, but no one convinced enough to take part.

    The components of this third phase of building the relationships are: (1) cultivate quality communication and interaction, (2) create meaningful communication, (3) move from communication to give-and-take relationships, (4) advance from relationships to a core team, (5) the core team leads to a network, and (6) the network advances to a living community.

  • Essential 4: Manage the journeys. This stage focuses on moving from building the community to giving that core community a sense of direction and clear priorities by choosing destinations and strategies. The focus is on alignment and commitment to projects and chartering, along with defining how to pursue the selected directions and revealing evolutionary resources, i.e., the technologies, materials, products, processes, skills, knowledge, etc., that could be utilized in the development using the innovation knowledge base (which could include patterns describing the evolution of technological and social systems). Fostering the understanding of the stages of the innovation journey helps the organization set goals, define success, and develop effective plans. Playmakers are those who ask about alternatives and eliminations with the following questions:
    • While the ideas may be interesting, are we reaching high enough here?
    • What is our real aim and purpose?
  • The technology or tools may be great, but are we solving the right problem?

    The components of this fourth phase of managing the journeys are: (1) choose destinations and set directions, (2) solve the right problems at the right time by moving from disorientation to selection, (3) choose where you want to go, what to eliminate, and the paths to get there, (4) define success, (5) plan for the unexpected (chance) with alternative operators, and (6) lead the way.

  • Essential 5: Create the solutions. This stage involves moving from leadership to power by designing, building, and maintaining optimal solutions. It helps organizations to bring the best people and technology together, along with the necessary tools and software, in order to generate complete and flexible solutions for the innovations and problems that you are trying to solve. A good creator uses modeling to ask the following:
    • Even if we have come up with a great idea, do we have the right people and the capability skill sets behind it?
    • Do we really understand the purpose of our designs?
    • Even if it is the right innovation area or problem to work on, are we willing to invest in the needed technology that it may take to deliver it?
    • Do we really understand if the economics are viable and doable?
  • A key to this stage is revealing and solving problems using modeling, resolving contradictions, overcoming limitations, etc., that can hinder the achievement of set goals using various instruments for problem solving, including the most recent ideation DMADV methodology. It could also involve some objectives: deployment, customer needs, customer experience, measurements, and management reviews. The components of this fifth phase of creating the solutions are: (1) design, build, and maintain optimal solutions using DMADV, (2) find the right people for the right work, (3) get the right tools to do the job in order to move from team to capability, (4) learn how to conserve scarce resources, (5) get the right information to the right people, (6) design solutions that evolve, and (7) shift the balance of power to create the dominant solution.
  • Essential 6: Deliver the results. This stage concentrates on moving from power to sustainable advantage through the stages of intuitive and disciplined implementation, which allows the organization to continually exceed expectations, and conquer complexity, scale, and friction. The key is performance, which is accomplished with simplicity, discipline, and a competitive advantage. This stage is all about performance, which uses the Knowledge Wizard as the following questions illustrate:
    • We may have a brilliant strategy, but can be execute and implement it?
    • Are the timeframes and resources unrealistic?
    • What are the biggest risks, and how can we manage them up front?

    The components of this sixth phase of delivering the results are: (1) practice intuitive, disciplined execution using the Knowledge Wizard, (2) simplify and specify, (3) set the pace and pilot the course, (4) make the right decisions at the right time, (5) optimize risk and return, (6) learn to fail small and early on to win big later on, and (7) maintain your leading cutting edge.

 

SUMMARY

One of the few things that we know for certain is that change is constant in organizations. This change can come in many forms and can include positive or negative attributes for individuals, departments, and the company at large. This chapter was structured to give you approaches that drive structured positive change and provides a fundamental foundation for successful LSS process improvement projects.

First, we discussed the three primary obstacles or resistance to change factors that can inhibit effective LSS process improvements. The most common resistance to change factors are fear of the unknown, beliefs, and measurements systems. The LSS practitioner should be prepared to recognize and understand these obstacles and use LSS concepts and tools to overcome them.

The essence of this chapter is the concepts of Kaizen, Kaikaku, and Kakushin, which are the three fundamental tools or conduits to deploy change in your organization. With the application of Kaizen in each of its common forms—Kaizen and you, Kaizen for process troubleshooting, and Kaizen teams—the LSS practitioner can become a driver of positive change with virtually all employee engagements. This can be assisting employees with small process improvement projects that each individual can complete on his/her own. The most widely known and used form is the Kaizen event or Kaizen continuous improvement team. Kaizen teams typically attack projects that are larger in scope than any one person can handle. These projects can be 2 to 4 days in length or can include team activities that can last several weeks.

The second fundamental concept and milestone is the transformation of mind concept, which reflects the LSS practitioners’ advanced knowledge as exhibited by the use of multiple LSS tools in unison. The ability to think and act across the entire value stream has become a part of your organization’s daily activities.

The third fundamental concept in this chapter is the systematic and standardized approach to change by innovation. The 20-20 innovation process demonstrates the six essentials of innovation that can be applied to LSS organizational improvements.

When employees begin to deploy the change management concepts presented in this chapter, a powerful positive set of changes emerge and the organization will begin systematically eliminating waste, improving processes, and expanding LSS knowledge for employees. These are the building blocks to improved product quality, increased employee productivity, and enhanced company profitability.

 

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* Massaki Imai, Kaizen—The Key to Japan’s Competitive Success, McGraw-Hill/Irwin, 1986.

Massaki Imai, Gemba Kaizen, McGraw-Hill, New York, 1997.

* William Bridges, Managing Transitions, 3rd ed., Da Capo Press, Cambridge, MA, 2009.

* Imai, Gemba Kaizen. McGraw-Hill, N.Y., 1997.

* Ibid.

* Reference for “Small Business,” Encyclopedia of Business, 2nd ed.

Ibid.

Bunji Tozawa, Norman Bodek, The Idea Generator—Quick and Easy Kaizen.

* Norman Bodek, “Kaikaku,” The Power and Magic of Lean; A Study in Knowledge Transfer.

* Knowledge Wizard® software, Indention International, Inc.

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