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Strategic Thinking for Leaders:

Building a Lean Culture

Dr. David HindsSpeaker

David Hinds, Ph.D., P.E.Associate Professor of Decision Sciences

H. Wayne Huizenga College of Business and Entrepreneurship

Strategic Thinking for LeadersBuilding a Lean Culture

October 8, 2015

“Lean is one of the biggest management ideas of the past 50 years”

- Duncan and Ritter, McKinsey & Company

“This is what I have been looking for my whole life”

- Keith Koenig, CEO of City Furniture

Lean Produces Results in Retail

Source: City Furniture

• Reduced operating expense as % of salesby 10%

• Reduced defective goods write-offs by $10,000 per week

• Reduced unloading/stocking cycle time by 90%

• Avoided $15 million in warehouse expansion

• Reduced floor space requirements by 25% to 75%

• Increased showroom sales closing rate by 15%

• Reduced customer delivery returns from 13% to 7%

• Showed continual improvement in customer satisfaction

Lean Produces Results in Manufacturing

Lean Advancement Initiative, Photos by Earll Murman

Lean Produces Results in Healthcare

A few of many examples

Waiting time for orthopedic surgery reduced from 14 weeks to 31 hours (from first call to surgery) – ThedaCare, WI

48% readmission rate reduction for COPD patients - UPMC St. Margaret Hospital, PA

$180M capital spending cost avoidance from lean improvements – Children’s Hospital, WA

72% reduction in lab results turnaround time from 2004-2010 without addition of head count or instrumentation – Alegent Health, NE

Lean Advancement Initiative

Lean Management System

VAISC Cycle Visualize Assess Improve Standardize Continue

Principles of Work Work as a Process Waste as the Problem Flow as the Solution

Management Practices Empowerment Collaboration Goal-Setting Coaching Recognition Consideration

Personal Values Integrity Accountability Respectfulness Trustfulness

Method Culture

David Hinds 2015, All rights reserved, dhinds@nova.edu

VAISC Cycle of the Lean Method

VISUALIZEUnderstand the

process, customers and value

ASSESSAssess performance and identify waste

IMPROVEDesign and implement

process changes to reduce waste

STANDARDIZESystematize the

changes and prepare to continue the cycle

CONTINUEContinually visualize

and assess the process

David Hinds 2015, All rights reserved, dhinds@nova.edu

“Only do things which produce value for your customers”

Impact of Lean Culture

Personal Values and Behaviors

High Organizational Performance & Fulfilling Workplace

Trust & Respect

Transparency EngagementApply Lean

Management Practices(with Lean Method)

David Hinds 2015, All rights reserved, dhinds@nova.edu

Impact of Lean Culture

David Hinds 2015, All rights reserved, dhinds@nova.edu

High Organizational Performance

Apply Lean Management Practices

(with Lean Method)

• Empowerment– Training (TWI)– Kaizen Teams

• Collaboration– Kaizen Events– Daily Improvements

• Goal-Setting– Hoshin Planning– Kaizen Event Goals

Lean Management Practices• Coaching

– Gemba Walks– Leader Standard Work

• Recognition– Awards– Bonuses

• Consideration– Celebrations– Flexible Schedule

Photo by Greg Harris

Collaboration at a Kaizen Event

Impact of Lean CultureHigh Organizational Performance

Trust & Respect

Apply Lean Management Practices

(with Lean Method)

David Hinds 2015, All rights reserved, dhinds@nova.edu

Trust and Respect

Impact of Lean CultureHigh Organizational Performance

& Fulfilling Workplace

Trust & Respect

Transparency EngagementApply Lean

Management Practices(with Lean Method)

David Hinds 2015, All rights reserved, dhinds@nova.edu

Transparency and Engagement

• What is transparency?– The ability and willingness to see things as they are– A willingness to share information with others– A willingness to admit your own faults without fear of

retribution– A willingness to task risks

• What is engagement?– Associates are proud of their organization and job– Associates have energy and are willing to apply that energy to

the organization– Associates are loyal and committed to the organization

Trust and Transparency in the Organization(Adapted from Covey 2006)

High Trust Low Trust Information is shared openly People withhold and hoard

information

Mistakes are tolerated and encouraged as a way of learning

Mistakes are covered up or covered over

People talk straight and confront real issues

People manipulate or distort facts

There is real communication and real collaboration

People spin the truth to their advantage

Transparency is a practiced value There are many “undiscussables”

People are candid and authentic People pretend bad things aren’t happening or are in denial

Respect and Engagement in the Organization(Adapted from Covey 2006)

High Respect Low RespectThe atmosphere is innovative and creative

New ideas are openly resisted and stifled

People are loyal to those who are absent Most people are involved in a blame game, bad-mouthing others

People share credit abundantly Getting the credit is very important

There are few “meetings after the meetings”

There is an abundance of watercooler talk

There is a high degree of accountability There are a lot of violated expectations, for which people try to make excuses

There is palpable vitality and energy – People can feel the positive momentum

People often feel unproductive tension – sometimes even fear

Impact of Lean Culture

Personal Values and Behaviors

High Organizational Performance & Fulfilling Workplace

Trust & Respect

Transparency EngagementApply Lean

Management Practices(with Lean Method)

David Hinds 2015, All rights reserved, dhinds@nova.edu

Lean Values and Behaviors

VALUES

BEHAVIORSShow RespectBe TrustworthyTrust Others

IntegrityAccountabilityRespectfulnessTrustfulness

David Hinds 2015, All rights reserved, dhinds@nova.edu

“Treat others as you would like to be treated”

Theory X and Theory Y(McGregor 1960)

• Theory X– “People are lazy and must therefore be motivated with

economic incentives and be controlled by constant surveillance.”

– “Employees are intrinsically in conflict with their employing organization.”

• Theory Y– “People are basically self-motivated and therefore need to

be challenged and channeled, not controlled.”– “It is possible to design organizations that enable employee

needs to be congruent with organizational needs.”

Beyond Theory X and Y (Schein 2010)

• “Human nature is complex and malleable and we cannot make a universal statement about human nature. Instead we must be prepared for human variability.”

• “Because humans are malleable, they often respond adaptively to the assumptions that are held about them … the more that employees are controlled and treated as untrustworthy, the more likely they are to behave in terms of those expectations.”

Recommended Follow-up Reading

• Lean Thinking by Womack & Jones• Carrots and Sticks Don’t Work by Marciano• The Speed of Trust by Covey• The Toyota Way by Liker• Lean Production Simplified by Dennis• What It Means To Be Lean by Hinds (forthcoming)

• Graduate Certificate in Entrepreneurship (15 credits)– Entrepreneurship/Venture Creation– Entrepreneurship Finance– Lean Entrepreneurship– Social Media Marketing– Entrepreneurship Lawhttp://www.business.nova.edu/certificates/entrepreneurship-certificate/

• MBA in Entrepreneurship (39 credits)– Above 5 courses– International Trade for Entrepreneurs– Sales Management– MBA Core courseshttp://www.business.nova.edu/masters/mba-in-entrepreneurship.cfm

NSU Graduate Entrepreneurship Programs

Thank You for Being Here!

David Hinds, Ph.D., P.E.Email: dhinds@nova.edu

Strategic Thinking for Leaders:

Building a Lean Culture