Norm Bodek on the Power of Kaizen: Unlocking Employee Creativity and Continuous Improvement – LeanBlog Podcast #1

In the first-ever Lean Blog Podcast, Mark Graban talks with Norm Bodek about quick and easy Kaizen and how it differs from large, event-based improvement efforts. Bodek explains how simple, employee-led improvements–supported by trust, experimentation, and respect for people–can make work easier while producing substantial operational gains.

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Here is my first LeanBlog Podcast, featuring author and consultant Norman Bodek, President of PCS Press.

I have to give credit for the idea to Norman, as he approached me about doing a series of audio interviews as a follow up to and continuation of our Q&A that I posted here on the blog earlier this year.

I'll take credit for turning it into a podcast, something that I plan on making a regular feature, every month or so. There will be additional conversations with Norman, and I also plan on interviewing other lean leaders and innovators.

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Visit the main page for all episodes and information about how to subscribe.

LeanBlog Podcast #1 Show Notes and Timeline:

• The difference between Kaizen and Kaizen events–and the early history of bringing the Kaizen Blitz, or kaikaku, to America — 3:18
• The early development of employee suggestion systems — 4:18
• How suggestion systems became bureaucratic “cost-savings systems” — 5:00
• How Toyota developed a system for encouraging small, employee-led improvements — 5:26
• The audio quality briefly declines around 6:00. Norm says:
  • “…ideas per employee per year–one per month, one implemented idea per employee. So that represented millions of ideas. In fact, I published a book once…”
• Norm refers to an early book about Toyota's suggestion system, now out of print but sometimes available used through Amazon at a rare-book price. The audio quality improves shortly afterward.
• How can an organization “manage 1,800 ideas” per month? — 6:40
• Norm's experience with employee suggestions at Gulfstream — 8:30
• Why Kaizen does not require a bureaucratic approval system — 10:40
• What incentives, if any, should companies offer for employee ideas? — 11:40
• The two pillars of the Toyota Production System — 13:05
• How to track and share employee improvements — 14:15
• Balancing Kaizen, experimentation, and standardized work — 14:40
• The supervisor's role in encouraging and spreading employee improvements — 15:40 and 22:30
• How Toyota's suggestion system changed over time — 16:50
• Why paying $20 for every idea created problems — 18:15
• Evidence that Toyota makes mistakes–and can learn from them — 18:50
• Focusing on implemented improvements rather than submitted suggestions — 21:05
• What happens when a supervisor criticizes an employee's idea — 23:00

Quotable Norman Bodek:

Here is a blog entry that Norman wrote about the podcast, with additional thoughts:

“Mark Graban interviewed me this past week for his first Podcast.  We talk about my discovery of Quick and Easy Kaizen, how it was the heart of the Toyota system, getting all employees involved in continuous improvement.  The puzzle to me is why every company doesn't add this most valuable process to their management lexicon.  We say that “People are our most valuable asset,” but we do very little to develop that asset to its fullest.   

China does represent short-term labor savings, but in the long term, we are giving away our companies to them.   This week I was watching parts of the  Tour de France bicycle race on television and saw one of the leaders on a Giant bike.

At one time, over fifteen years ago, Schwinn was probably America's leading bicycle company.  They went to Taiwan to manufacture their bikes to take advantage of the low labor cost.  The company in Taiwan was Giant.  Initially, Schwinn wanted to reduce their assembly costs, but Giant convinced them to also save money on engineering and every other phase of manufacturing and design.  After ten years or so when the initial contract was over, Giant told Schwinn, “We don't need you anymore.  We know how to make great bikes, you taught us how.”  All we have to do is learn how to market the bikes.  Shortly thereafter, Schwinn went bankrupt and sold their “name” to another American company.

Unfortunately, we are great at short-term thinking.  Toyota recognizes the threat from China but they are building more and more automobiles in America.  If they can do it, why can't other American companies do it?  To me, the only difference between Toyota and American manufacturers is that Toyota develops its people, and the best way to develop people is from their own creative ideas.

Please do listen to the podcast…

And give me some feedback,

Thank you”

Here is an amazon.com link to Norman Bodek's Books.

My announcer is my old friend, Steve Sholtes, a musician from Michigan.

Podcast Introduction

Announcer: Welcome to the Lean Blog Podcast. Visit our website at www.leanblog.org. Now, here's your host, Mark Graban.

Mark Graban: Welcome to the first-ever Lean Blog Podcast. This is Mark Graban, creator of the Lean Blog, and my guest today is Norm Bodek, one of the leading voices in the lean manufacturing world. I'm very happy to have him here with us.

But first, a little bit about this podcast. This is my first attempt. You'll notice I'm not a professional broadcaster; I'm a lean consultant.

I've worked with lean as an engineer and a consultant for about 12 years. I started what was then the Lean Manufacturing Blog in early 2005, when I was working as an internal lean change agent for a large manufacturing company. I continued the blog after moving last August into a new role as a lean healthcare consultant working in hospital settings.

The website evolved into what we now call simply the Lean Blog because it covers manufacturing, healthcare, and aspects of lean that apply in almost any industry. The blog has been a great learning opportunity for me. I'm hoping this podcast will expand my learning and that others will join me in that learning journey.

This is the first of what I hope will be a monthly series of podcasts, each featuring an interview with a leader or innovator in the lean world. Today, I'm starting with Norm Bodek.

He is the president of PCS Press, a publishing, training, and consulting company based in Vancouver, Washington. He discovered and published the work of two foundational figures in the Toyota Production System, Dr. Shigeo Shingo and Taiichi Ohno. Through his numerous trips to Japan, he introduced the Western world to the Kaizen Blitz, Single-Minute Exchange of Die (SMED), Total Productive Maintenance, Hoshin Kanri, Poka-Yoke, and other manufacturing methodologies that have helped companies improve quality and productivity around the world.

Norm has written countless books, including The Idea Generator: Quick and Easy Kaizen and his most recent book, The Power and Magic of Lean. You can learn more about Norm and his books at www.pcspress.com.

Norm, thank you very much for being here for the first Lean Blog Podcast. It really is a pleasure to have you.

Norm Bodek: Mark, I want to thank you very much for doing this with me. I think it's going to be a lot of fun. We'll talk about a lot of management issues. Hopefully, this will stimulate many people to focus more on continuous improvement.

Our first topic is quick and easy Kaizen: what it means, why it's so important, and why I think it's at the heart of the Toyota Production System.

Quick and Easy Kaizen Versus Kaizen Events

Mark Graban: I was hoping we could start by talking about the background of quick and easy Kaizen. That's the title of one of your books, of course. Tell us how you discovered that approach and how it differs from what other people think of as Kaizen or Kaizen events.

Norm Bodek: Yes, they are distinctly different. It's a shame that Bob Hall and the other person changed the name. Originally, it was called “Five Days and One Night.”

I met Ohno's two chief assistants, Iwata and Nakao. They told me they were leaving Toyota and wanted to come to America to teach consultants. I said, “Fine. I'll bring you over, and I'll run events for you.” And I did. I brought them over, and they ran these events called “Five Days and One Night.”

Then Bob Hall changed the name to Kaizen–the Kaizen Blitz–which is not appropriate because Kaizen really means small, incremental improvements. Kaizen is change. Kaizen is small, continuous improvement.

A Kaizen Blitz is really kaikaku, which is the name of my other book. Kaikaku means radical change, and that's what a Kaizen Blitz is: a radical change. Kaizen, as I said, means small, incremental improvements that get everyone in the company involved.

From Suggestion Systems to Employee-Led Improvement

I credit the suggestion system to Kodak in 1898, and the first suggestion was to clean the windows. It's a wonderful idea. The purpose of a suggestion system was to gather ideas, involve all employees, empower people, and help them participate directly in the organization.

But in the late 1800s and early 1900s, people were often doing very simple, repetitive tasks, and supervisors would not let workers make these changes themselves. Even today, when you start a suggestion system, people often propose things for other people to do rather than improvements they can make themselves.

The suggestion system evolved into a cost-savings system. The average American company with such a system would get one idea per employee every seven years, according to statistics from the American Suggestion System.

Toyota reexamined the American suggestion system while studying American management. They said, “We want to get all of our employees involved.” They were using quality circles, which put people into teams. Teams were coming up with ideas, but how could Toyota get everybody to propose small ideas that made their work easier and more interesting?

Toyota initially adapted the American system and then slowly changed it. In the first year, I think Toyota received one idea per employee for the entire year. After about 10 years, it was up to 46 ideas per employee per year–nearly one implemented idea per week from every employee.

That represented millions of ideas. In fact, I once published a book called 40 Million Ideas in 20 Years at Toyota. Forty million ideas. The number is astronomical, and companies immediately wonder, “How can I manage that many ideas?”

I gave a lecture to a company here in Oregon. The manager had 900 people in the plant. I said, “If I have my way, you could get two ideas per month per employee.”

He said, “No. I have 900 people. I can't manage 1,800 ideas.” And he wouldn't move forward.

That was so silly because management doesn't have to manage all those ideas. People manage them themselves. They come up with an idea and implement it themselves.

The beautiful part of quick and easy Kaizen is that it is a system–a process designed to stimulate and encourage everybody to participate in change and use their creative ability.

Many people have boring, dead-end jobs in factories, and many hate coming to work. When I ask audiences which day of the week they like, almost everyone says Friday, Saturday, or Sunday. Almost nobody says, “I love Monday” or “I love Tuesday.” They don't like work, yet most of their lives are spent at work.

One reason is that they don't have a creative opportunity at work. Quick and easy Kaizen is brilliant because it gives everybody the opportunity to be creative, even about the smallest thing.

I gave a lecture on Tuesday at Sandia Labs in Albuquerque, New Mexico, and I kept misplacing my pointer. I asked the audience, “What can I do? Help me. What can I do?”

Right away, somebody said, “Put a string on it,” or “Put a piece of Velcro on it.” There are so many clever ideas we can use to make our lives easier.

This system was adopted by almost every major Japanese corporation. The average in Japan is two ideas per employee per month–24 per year.

A Gulfstream Example

I worked with Gulfstream in Mexicali, Mexico. I first went there about a year ago, in April, to provide training. Their goal was to get one idea per employee per year. They had about 1,000 people, so they wanted 1,000 ideas. Before that, they had been getting about one idea per employee every seven years, just like the American average.

I ran a two-day course with them, and now they're up to 1,000 ideas a month. They're getting one idea per employee per month.

I'll give you one example. At Gulfstream, people–predominantly women–build the wire harnesses inside an airplane. It took two women seven days to complete their part of one harness, and then they spent four hours checking it.

To check the wiring, they had to bend down under a panel about the size of an airplane wing. They pulled out approximately 50 plugs and connected each plug to the panel to verify that the wiring was correct. They spent four hours doing that every seven days.

After my course, when we asked people to make their work easier, one woman said, “Instead of bending down, why can't we move all the plugs to the top of the panel?”

So they did. They put all the plugs on top of the panel, where the workers could easily pull them forward and make the correct connections. Instead of spending four hours, they completed the check in one hour.

Two women each saved three hours per week, for a total of six hours. Across 40 airplanes in a year, that saved 240 hours from one small idea. There were 40 similar panels in that plant, so multiplying 40 by 240 produced approximately 9,600 hours of savings–all because we encouraged people to copy one another's improvements.

Keeping the Process Simple

Mark Graban: You've described a process without, I imagine, a large bureaucracy for harnessing these ideas. I think of traditional suggestion systems as requiring someone to fill out a form, which then goes through a committee. Of course, there's a great deal of waiting, waste, and delay before someone blesses the idea as a good one. How was the process different in the wire-harness example?

Norm Bodek: Very good, Mark. The old suggestion system became bureaucratic because companies gave 10 percent of the savings back to the worker. Then the accountants got involved. Before they would give you 10 percent, they could drive you crazy trying to calculate the savings. The company was saving 90 percent, but it worried about the 10 percent. That created bureaucracy.

In this system, you don't give employees 10 percent of the savings for their ideas. Some companies do, including Toyota, which we'll discuss in a few minutes. Toyota uses both approaches.

The average company in Japan might give $5 for an idea. Many companies don't give anything. When I teach in America, I don't encourage companies to pay for individual ideas. I encourage profit sharing, perhaps a bonus system, and maybe prizes at the end of the month.

Toyota does things cleverly. If you have perfect attendance for an entire year, they might put your name into a barrel and give away 15 cars at the end of the year–things like that. You don't have to reward each idea directly.

The process is not bureaucratic. A person comes up with an idea, and the system encourages that person to implement it.

Mark Graban: So, as a manager, you ask people to run experiments. If they have an idea, you say, “Go try it and see whether it works.” Is that part of the process?

Norm Bodek: Yes. I keep it very simple. You come up with an idea and check with your supervisor when necessary. You need to check with the supervisor to get started, but if I'm going to put a piece of Velcro on a small clicker, I don't need to ask my boss for permission.

I see two things at the heart of Toyota's success–two pillars. One pillar is lean, the elimination of waste. The second pillar is respect for people. Respect for people means you trust people.

When you set up a system like this, you trust people to do what is right for the company. If they don't, they will learn, just as everybody else learns.

We keep it very simple. Look at Technicolor. When I started teaching there, in 2001, they received 250 ideas from 1,800 people, and 113 were implemented. That is a typical American suggestion system: one idea per employee every seven years.

During the most recent 12 months, they received 27,000 ideas, and 17,000 were implemented, from the same population of about 1,700 to 1,800 people. They hired no additional person to administer those 27,000 ideas.

Mark Graban: Someone was counting the ideas at some point, I assume.

Norm Bodek: They count them, yes. The way the system works is that you document your idea on a simple form and implement it. Then you submit it to your supervisor. The supervisor keeps statistics for the group and passes them to one central person who keeps the companywide statistics.

The ideas are posted on walls throughout the factory and the offices so people can see them. We also encourage people to copy one another's improvements.

Standardized Work and Experimentation

Mark Graban: How do you balance standardized work with Kaizen and experimentation? If people are trying things, they may deviate from the standard. How do you keep the system from degrading?

Norm Bodek: That's a very good question. Standardized work, unlike the old kind of standard that was cast in stone, encourages people to make changes.

Standardized work represents the best known way to do something. If somebody finds a better way, you change the standard. The same principle applies here.

Most of these small ideas have nothing to do with the standards. Some will, but most are simply ideas that make people's work easier.

Managers Ask Instead of Tell

Mark Graban: As a supervisor or leader in this environment, you're keeping track of suggestions. When you see something working, you help spread it by asking or encouraging others to adopt it: “This was a good idea. Could you use it, too?”

Norm Bodek: Very good, Mark. What you're describing fits the Toyota system, which I like very much. Managers are taught not to tell, but to ask.

I owned a company called Productivity, and I had about 127 people. I never asked anybody. I was the boss. I assumed I must be the smartest person because I owned the company. That was my attitude. I never asked; I just told.

Toyota is completely different. Its managers are taught to ask. When a worker comes up with an idea, you look at it, compliment the person, and do not criticize the idea. That is very difficult for many American managers, but you don't criticize.

Then you hang the idea on a wall and encourage everybody to read one another's ideas so they can copy them.

The worker also has to think broadly. If an improvement affects the second shift, the person should check with the second-shift worker to understand the effects. That is why I like the second pillar: respect for people. People are mature. Given the opportunity, they'll do a superior job.

How Toyota Adapted Its Suggestion System

Mark Graban: That provides a good background on the differences between Toyota's Kaizen approach and what we normally see with suggestion systems. Let's focus on Toyota. You mentioned that Toyota has made some changes to its approach to Kaizen.

Norm Bodek: Yes. When Toyota came to America, it moved very carefully. It did not want to impose the Japanese system too quickly. Whether at NUMMI, Georgetown, or elsewhere, Toyota took time to establish its system. Even its just-in-time system took a long time to put in place.

When Toyota first came over, it largely adapted the American suggestion system and added a variation of the Japanese system. The American version differed from the Japanese one. At NUMMI, Georgetown, TMMK, and Cambridge, the approach became a combination system.

A worker could receive several thousand dollars from Toyota if an idea saved a great deal of money. That was rare in Japan, although Toyota still encouraged very small ideas.

At first, I don't think they gave any money. Then they gave a little money, and then they made a mistake. Somebody said, “Let's give $20 per idea.” So they did.

A couple of people became very clever. One man generated so many $20 ideas that he earned enough for a swimming pool. If I shuffled a piece of paper from one side of the desk to the other and called it an idea, I received $20.

One of the senior managers–I don't know who it was; it might have been Mr. Cho or whoever was in charge–said, “That's crazy. We're not going to do that anymore.”

But you don't throw the baby out with the bathwater. You don't abandon a good system because you made a mistake by paying $20 for every idea.

I would have handled it very simply: give $20 only if the idea is worth $20. If it is worth $20, pay $20. If it isn't, thank the person, recognize the idea, and put the person's name into a drawing for two dinner tickets at the end of the month.

Mark Graban: There's a story for people who think Toyota never makes mistakes.

Norm Bodek: Toyota made a major mistake with the suggestion system because they largely stopped it. They went from 50,000 ideas to 500. I think this happened in Cambridge and Georgetown after they eliminated the $20 payment.

They didn't eliminate the system entirely. I need to call them; I haven't spoken with them recently to see whether they readapted it and made improvements. I don't think they did, although perhaps they made some good changes.

Even in Japan, Toyota reevaluated the system. The rate dropped from 46 ideas per employee per year to approximately nine or 10. They changed the system there, too. Subaru, by comparison, received 108 ideas per worker in one recent year.

Mark Graban: What do you think accounts for that difference? Is it a difference in management approach? Does Subaru make a greater effort to track ideas?

I've always wondered about Toyota's suggestion numbers. How many of those small daily Kaizens–those little changes–do people actually stop and formally document? Could reduced documentation explain the lower number?

Focus on Implemented Ideas

Norm Bodek: Toyota documented every one of them, and that's what I teach. The 27,000 ideas at Technicolor are all documented and posted on the wall.

Even ideas that have not yet been implemented are posted because other people might help implement them. But I encourage organizations to focus on implemented ideas, not merely suggestions. I prefer a system in which nearly 100 percent of ideas are implemented.

The expectation is that if you come up with an idea, you get it done. You either implement it yourself, ask your supervisor for help, or ask a team leader or team member to help you.

Some ideas might require engineering or maintenance. You might have a good Poka-Yoke idea but not know how to cut the wood, so you ask somebody to help you cut it.

But I don't want you to abandon your idea or hand it off for somebody else to own. I want you to retain ownership of it.

Turning Complaints Into Improvement

Mark Graban: Another thing I like about that approach is that it shifts the emphasis. People often bring complaints to their supervisors: “Here's what's bothering me.” This approach seems to encourage people not merely to complain, but to say, “Here's a possible solution.”

Norm Bodek: We use a very simple form: “before improvement” and “after improvement.”

Complaints are not necessarily bad. You want an avenue for people to express complaints. But, as you said, Mark, you turn the conversation toward continuous improvement, because that's what Kaizen means.

Supervisors must be very careful not to criticize. I was teaching at one company, and a woman brought one of the first submitted ideas to her supervisor. We were telling everybody, “We want you to come up with at least two ideas per month.”

At most companies now, I tell people, “I want to see one idea per week. I want you to come up with 50 ideas.” You can do it very easily. I know people who generate one implemented idea every day.

At Gulfstream, Oscar Ortez comes up with at least one implemented idea every day.

This worker brought her idea to the supervisor. The supervisor looked at it and said, “That's not exactly what we mean.”

The worker walked out of the room. What do you think she said to her coworkers?

Mark Graban: I'm sure she was discouraged, and that might have been the last thing she suggested.

Norm Bodek: Absolutely. You're right, Mark. She said, “I'll never give them another idea.”

The funny thing is that this is so simple. I'm working on a new book, trying to understand why we don't adopt these simple practices more widely.

Technicolor said it saved $8 million last year, for the third year in a row. In three years, the company saved $24 million through ideas from its employees.

The average savings in Japan is $4,000 per employee per year. ArvinMeritor, an automotive parts company in Michigan, also reported savings of about $4,000 per employee per year.

Why aren't more companies doing this? We're running to China to save money when we could save a fortune simply by asking our own people to help.

Closing Thoughts

Mark Graban: That's all the time we have. Norm, thank you again for being here for the first-ever Lean Blog Podcast.

Norm Bodek: Thank you very much, Mark.

Applying Kaizen in Healthcare

Mark Graban: That concludes the first podcast. I'd really like to thank Norm for joining me.

We talked about suggestions, and, ironically, this podcast itself was Norm's suggestion. He approached me about doing an interview, and that turned into this podcast, which I plan to continue as a monthly feature. I hope to have more discussions with Norm, as well as other leaders and innovators in the lean world.

Norm also commented on people working in boring, dead-end jobs. In my work in healthcare, I've seen examples of that in hospitals.

In one hospital laboratory, a woman told me she felt “like a robot” because of advances in laboratory equipment. She was a scientist, but she felt she had been reduced to the role of material handler, loading tubes into an instrument. Most of the time, she didn't even look at the test result unless something unusual required her review.

I talked with her about how lean–and Kaizen in particular–could make better use of her brainpower, training, and experience as a medical technologist. Her job would not be limited to loading tubes into an instrument. It would also include developing ideas every day to create a better workplace and, ultimately, provide better care to patients.

In healthcare, we are fortunate that it is relatively easy to rally people around the patient. That's why many people enter the field, and it is an important reason to practice Kaizen in daily work.

Whether you work in a factory, a healthcare setting, or any other environment, if you're working with lean, I encourage you to look beyond reducing waste. Look at the second pillar Norm described: respect for people. Consider how you can ensure that people are genuinely contributing rather than merely being treated like robots.

Thanks for listening. This has been the Lean Blog Podcast. For lean news and commentary, updated daily, visit www.leanblog.org. If you have questions or comments about this podcast, email mark@leanpodcastmail.com.