How Good is Your Management System?

 

What’s the purpose of a ‘management system’? What are its key elements? What are common failure modes?  How do you know if you have a good one?

My job the past few decades has been to help our partners meet their business goals by developing strong people & management systems. My personal mission is to teach leaders Ambidexterity – the ability to both

a) Protect the core with OpEx/Lean, and

2) Ignite new Growth using the methods of Silicon Valley & Singapore.

Your management system enables both and is analogous to the wire harnesses that enable high performance airplanes & automobiles. I’ve written at length about the questions above. In this piece I’d like to describe the tell-tale attribute of a great management system.

Key Attributes of World Class Management Systems

World class management systems make problems visible.

By ‘problem’ I mean the difference between

·       What Should Be Happening, and

·       What is Actually Happening

Each of these must at least define purpose, process & key metrics. By ‘visible’ I mean obvious to all team members.  ‘Everybody knows’, to paraphrase Leonard Cohen.

In practice this means that problems are painfully clear at team boards at every level - from the Senior Leader Obeya to front line team boards & huddle sessions. When I’m asked by a Board or Senior Team to ‘assess our management system’, a key step is to walk the value stream backwards, starting with the customer, and moving upstream one step at a time. A parallel step entails walking the customer journey backstream, starting with the top of the proverbial funnel.

In my value stream walks, I ask questions like:

·       Are problems visible (even to an outsider like me)?

·       What do people talk about in their huddles? Are problems understood & addressed in a clear & decisive way?

·       What’s the organization’s attitude to problems? Are problems hidden, a sign of failure? Or are they, to quote W. Edwards Deming, ‘the process speaking to us’?

·       Do teams have a standard approach to problem solving?

·       How good is the data? Is it complete, end to end, and of high quality?

·       Does the team develop ‘Your Own Data’ (YODA) as required? Or do they passively wait for corporate data?

Here are your key checkpoints:

·       The visibility of problems, and

·       Quality of problem solving (the focus of upcoming articles)

I vividly remember an engagement with a large multinational consumer goods company.  They were good, capable people and their company had enjoyed strong growth for several years. They’d invested in teaching their team members root cause problem solving. I spent a few weeks walking the most important value streams from the customer all the way upstream. I attended team huddles and walked the shop floor.

I presented my findings to the COO & senior management team:

·       Everything looks good on the surface – purpose strategies seem cogent, data seems to be flow, workplace fundamentals look okay on the surface (e.g., 5S, standardized work, visual management), and morale is fairly good.

·       But there's flashing RED light – team boards at all levels are always Green; the critical third wall of the Obeya (Blockers) is usually empty.

‘But we’ve given everybody problem solving training,’ the team responded. ‘

There's flashing RED light,’ I repeated, and added the my old sensei' motto, ‘No problem, is a big problem.’

My report fell on deaf ears.

Six months later there were major outbreaks of food poisoning related to their products. Several customers became ill, and the company’s brand suffered serious damage. A number of senior leaders resigned.

The visibility of problems and quality of problem solving are your early warning system, and a key to de-risking your enterprise.  You want to assess your management system?  Start there.

Best wishes,

Pascal Dennis         E: pascal.dennis@leansystems.org

Lean Pathways Blog Milestone – 1,500,000 Visits

 

My blog hit a milestone last week – 1,500,000 visits. I started writing in early 2013, tentatively, not understanding the medium, and facing a heavy work burden. My marketing sensei, the splendid Holly Simmons, suggested a weekly blog: “You say you want to share what you’ve learned? Well, what are you waiting for?”

                        Pascal's Ikigai: Mentor, Create, Have Fun

Fourteen years later, I’m still at it.  Blogging is a way of sharing & checking my thinking.  ‘Does this make sense. Am I on the right path?’

I’ve pivoted a number of times, based on fresh interests & new learning. The past several years I’ve been telling the story of my adventures in Singapore & other innovation hot spots. It’s been a nine-year journey working with my colleague, Laurent Simon, in new geographies and industries (Insurance, Banking, Consumer Goods, Energy). I’ve learned that ‘Ambidexterity’ is the leader’s Job One. We must both protect the core business with Lean/OpEx and ignite new Growth using Digital methods. AI only intensifies the need to do so.

My pivot initially caused confusion – I thought you were a Lean guy. Indeed, cost reduction & avoidance through Lean/OpEx provide lasting value - but it’s no longer enough. As Noriaki Kano taught, ‘Delighters’ decay and become ‘must haves’. Lean/OpEx is a necessity, but it’s no longer a Wow. My job is teaching ambidexterity to leaders. In keeping with my ikigai, I have a foot in both camps. Mentor, Create, Have Fun.

Thanks for reading,

Pascal Dennis         E: pascal.dennis@leansystems.org

Stratex Fundamentals – Goal Setting

How do we set strategic targets? What does our trajectory typically look like? What drives it? Do the StratEx lessons I learned as a young Toyota engineer & manager still apply?

Aim for the fences, settle for a double off the wall...

I grew up in the ‘90’s on a steady diet of the Toyota Production System (TPS). Our compass through the churning waters of continuous expansion was a business system called ‘Hoshin Kanri’ or Strategy Deployment. I’ve experienced countless cycles now & have written about it extensively. The past decade my practice has evolved toward ‘ambidexterity’ and fields like financial services, consumer goods & Tech. My hypothesis: those will prosper who can both protect the core business with OpEx and ignite new growth with Digital methods. 

So, do the TPS methods & mindsets I learned as a young engineer & manager apply? Yes, provided you translate & adapt them for each industry.  A common failure mode: ‘Here’s how we did it at Toyota ABCD…’, to which the COO, CFO, CMO, CIO et al respond, quite reasonably, ‘Who cares…?’ With that prologue, let’s see if we can answer the questions posed above.

How Do We Set Strategic Targets?

Set targets just beyond what your team thinks they can achieve. How do you know what they think? By scheduling Daily/Weekly/Monthly management walks. Okay, maybe Daily is difficult for a senior executive to sustain, but you know what I mean. To set targets you must know your business & team, which means you have to be there. Thus, you can answer core leadership questions like:

·       What is the nature my team? What is the nature of our industry & competitive challenge?

·       What is the capability of each team member? What motivates (or demotivates) them? Under what conditions do they thrive (or struggle)?

·       How capability are our processes? What are common failure modes?

·       What robust is our hardware? (Machines, info systems, supply chain…)

·       What is the capability of our software – both information systems, and culture?

·       What are the strengths & weaknesses of our management system?

Setting targets this way often produces a trajectory like the one I’ve illustrated. We don’t quite achieve our targets, but year after year we get stronger & build our muscles. In a few years, we’re a tough, capable team.

Failure Modes

Setting modest, unimaginative targets is perhaps the most common failure mode. What can cause this? Poor incentive structures, a weak grasp of blockers, unclear & unreliable data because of cumbersome central systems and a lack of YODA (Your Own Data)

Setting outlandish targets absent any real understanding of the business, team & competitive challenge is also a common mistake.  This is akin to the general manager of a baseball team blithely ignoring the team’s weaknesses & competitive position, while demanding they win 150 games next season and sell out every game.

A third common error is not setting effective improvement process targets. Want people to get good at value-added problem-solving? Set explicit targets for each team & check on them regularly. Start with modest targets, e.g. ‘Each team will close one significant problem per quarter usually scientific problem solving. Recognize & reward high achieving teams, e.g. with a ‘Problem Solving Expo’ or ‘Fair’ wherein teams demonstrate what they’ve been working on & the value they’ve derived.

Next time, what drives Stratex achievement & how do we sustain it?

Best wishes & a splendid 2026,

Pascal Dennis         E: pascal.dennis@leansystems.org