Pascal Dennis on The Remedy: Bringing Lean Beyond the Factory

---

Our guest for Episode #96 is Pascal Dennis of Lean Pathways, Inc. Pascal is a faculty member with the Lean Enterprise Institute and he's the author of the books: Lean Production Simplified, Andy & Me: Crisis And Transformation On The Lean Journey, and Getting the Right Things Done: A Leader's Guide to Planning and Execution.

Here in this podcast, we talk about his new book, The Remedy: Bringing Lean Thinking Out of the Factory to Transform the Entire Organization.

A sequel to Andy & Me, this novel follows Tom Pappas as he takes on the challenge of helping a struggling automaker beyond the shop floor–connecting design, make, and sell in ways that build resilience and restore customer trust.

We explore themes such as:

• Why job security commitments are essential for Lean transformation
• How “big company disease” (silos, bureaucracy, and disconnects) undermines flow
• The role of standards as foundations for creativity, not straightjackets
• Extending Lean thinking into areas like product development, healthcare, sales, and service
• The importance of leaders developing people, not just processes

Pascal also shares rich analogies–from orchestras to jazz improvisation to the Rolling Stones–that illustrate how Lean systems create both discipline and freedom for people to thrive.

To point others to this episode, use the URL www.leanblog.org/96.

For earlier episodes, visit the main Podcast page, which includes information on how to subscribe via RSS or via Apple Podcasts.

If you have feedback on the podcast, or any questions for me or my guests, you can email me at leanpodcast@gmail.com or you can call and leave a voicemail by calling the “Lean Line” at (817) 372-5682 or contact me via Skype id “mgraban“. Please give your location and your first name. Any comments (email or voicemail) might be used in follow ups to the podcast.

Transcript:

Mark Graban: My guest today is Pascal Dennis of the firm Lean Pathways Inc. Pascal is a professional engineer, author and adviser to North American firms making the Lean leap.

Pascal developed his skills on the Toyota shop floor in North America and Japan and by working with major international companies. He is also a faculty member with the Lean Enterprise Institute.

Pascal is the author of books such as Lean Production Simplified, Andy and Me and Getting The Right Things Done.

Today we are talking about his new book which is a sequel to Andy and Me. The book is called The Remedy.

Mark: Well, Pascal, it's great to have you finally as a guest here on the podcast. Thanks for joining us.

Pascal Dennis: It's my pleasure, Mark. Thanks for the invite.

The Remedy and the Job Security Promise

Mark: So, want to talk about your new book, The Remedy. I was wondering if you could start off by giving us the setup to the story and how it's a follow-up to a book many of the listeners, like myself, may have read, a book called Andy and Me.

Pascal: Well, as you say, The Remedy is a sequel to a book I wrote five years ago called Andy and Me. And it's further adventures of Tom Pappas and Andy Saito, I suppose.

Five years ago, they took on the challenge of saving an automotive plant, New Jersey Motor Manufacturing and since then, the plant has really thrived and prospered through Lean principles. And the plant is doing extremely well, but the mother company Taylor Motors is in terrible shape.

In fact, they're bankrupt and subsisting on government handouts. So, Rachel Armstrong, who's now Senior Vice-President, asks Tom, who's one of her best leaders and most original thinkers in her view, to take on a bigger challenge. She asks Tom if he would become the Shusa, or the Chief Engineer or Key Thinker or whatever term you want to use for an entire platform.

An environmental car that Taylor Motors is launching and that desperately needs to succeed because they not only have to pay off their government loans and get out of bankruptcy and solve all their other problems but they've got to make a splash in the marketplace to regain the trust of their customers.

All the people that are wondering what's happening with Taylor Motors. Are my warranties going to be honored? Is this going to disappear entirely? Tremendous uncertainties so they have to make a splash with the new environmental car. That's the background.

Mark: It's a book that's clearly about transformation challenges in culture and management styles. One of the things I appreciated was how you pointed out, right away, it's an important point, it was right on page two, this idea and the story that nobody will lose their job because of improvement work.

I was wondering if maybe you could talk about that as a general theme and philosophy with Lean and how that fits in maybe with a company that is going through some real difficult business challenges.

Pascal: In order to do extraordinary things, you have to involve all your people. That's blindingly obvious and usually ignored. It's a very strange thing in my view. We want to motivate our people by laying off a whole bunch…of them and shutting down sites and off-shoring work?

If we accept that, then we've got to make that promise up front and we've got to keep that promise. Then, if you've got good values, if you've got a strong sense of who you are as a company and as individuals, you have a chance to motivate everybody and focus them on a great endeavor. Something remarkable.

You have a chance to break through, you have a chance to be in the top one percent of companies. They are only possible if you've got the trust and the regard and the faith of all your people. It's transparent to me but for some reason, it's hard for some people to accept.

They think, “You've got to cut jobs and cut factories and bleed the company down. That's supposedly tough management and I just think it's dumb, personally.”

Mark: A lot of people in the Lean community have been talking about this for a very long time, this idea that you say is blindingly obvious. There's got to be a mental model or something that's a sticking point from getting people to see that that's a necessary part of the Lean transformation, that commitment and that trust.

What would you say gets in the way in the real world?

Pascal: I think, as you say Mark, dysfunctional mental models get in the way. You and I have talked about in length, leaders, for example, not accepting that their role is to develop capability in the people, in their machinery, in the process, and the supply chains.

Many other dysfunctional mental models and I've described them in detail in the book, Getting the Right Things Done. I think one thing that has struck me increasingly in the last few years is a root cause of this foolish and excessive downsizing and bleeding down of the company's assets.

A root cause of it is that we are outsourcing, not just production, but also thinking. We are outsourcing our thinking. We're deferring to so-called pundits that we see on TV or consultants that you have to off-shore everything and they show us complex algorithms, which seem to make sense.

Rather than saying, “Wait a minute. That doesn't make any sense at all,” We accept the conventional wisdom and we outsource our thinking. Everybody, lemming-like, follows the so-called leaders and then a decade later or two decades later, we don't know how to make things anymore.

We lose core skills like machining, like the core design and very intricate assembly, reassembling and such high level skills. We're outsourcing thinking.

Big Company Disease and Seeing the Whole Value Stream

Mark: On the theme of maybe better thinking or Lean thinking, it seems one of the main themes of the book The Remedy is how to get flow across different business functions that seems maybe the challenge for Taylor Motors is not just a narrow, Lean production challenge about implementing Lean tools.

That maybe that's not enough in a lot of real world cases. I was wondering if you would talk about that theme without giving away the end of the story. If you can touch on why that's an important theme in the book.

Pascal: One of the villains in the book is “Big Company Disease”. Big Company Disease manifests in a number of ways and most obviously, as you suggest, in disconnect between divisions, between functions, between people that normally should be working together as customers and suppliers, internal customers and suppliers.

Big Company Disease causes a thick and anesthetizing fog to envelop the company. You can't see upstream or downstream, you can't see your biggest problems and the lateral connection, which is how value flows, is lost.

Again, this isn't through ill will or anything, but people wanting to do a good job will optimize what they can see because what is out of sight is out of mind.

If I can't see upstream or downstream, I'm going to try to make my little corner better but that generates the problems you are talking about, silo efficiency.

Silo efficiency does not equal overall efficiency so the challenge is to cut across complex organizations, multiple sites, multiple divisions, and multiple silos, multiple countries and continents and create a line of sight between a customer and what they want and what we do, connect everything.

You can pull and flow and start to harvest all the opportunities that Lean makes available.

Mark: I think it's one of the points that people miss, even if you go back to The Machine That Changed the World, a lot of people say a lot of times even the subtitle of the book, “The Story of Lean Production”, and they think, “Factory floor quality and factory cycle time”.

But even in that book it talked about Toyota's product development cycles being so much shorter than the big three. Can you share a little bit of your experience at Toyota, in terms of applications of what we would call Lean outside of the factory floor, or how some of those connections were made across different parts of the company?

Pascal: It's a great question, Mark. Still, I have to underline what you're saying. The Lean business system comprises three systems; the design, the make and sell subsystems. But most of the attention, as you say, has been on the middle one, on the make system, the so-called “Toyota production system.” But the design and the sell systems are at least as important, and some people say more important.

Here's what I saw, working at Toyota, of the outside the factory connections. We would regularly connect with our chief engineer or Shusa for the models we were making – the Corolla and the Solara, for example.

The Shusa's job was to wrap his arms around the entire Corolla or Solara platform, and that's wrap his arms around the upstream elements – design, sales, marketing; all the way downstream to the distribution system, right down to the dealers.

He had a small team of people, but on a regular cadence they would visit us, pre-, during and post launches; whether they were major model launches, or model refreshes.

He would connect with us on our top 10 quality problems, our top 10 ergonomic problems, our top 10 assembly problems. They'd also go to our sister company, NUMMI for example, or Toyota Turkey or other companies around the world that were making the Corolla, for instance.

Thereby, they would identify hot spots upstream and downstream in the value stream, and be able to develop great insight. For example, I've no doubt the Shusa would say, “Look. The way we have designed the body here is generating all sorts of ergonomic problems downstream in manufacturing. Moreover, it's generating these machine problems way over there in machine design.”

The Shusa was able to zoom out and see the entire value stream – design, make, sell, and make connections other people couldn't. The bottom line for us was, at the next iteration, the next model refresh, the problems we had identified were gone. We didn't have to deal with those quality problems, or ergonomic problems, or machine problems that we did before.

Literally, we got better every day. It's continuous improvement, and that wouldn't have been possible without that Shusa function, that person who wraps their arms around the entire platform, including design, make and sell.

That's probably the most obvious one. There are a number of others, but the whole point was clearly to generate a holistic understanding and connection with the customer.

Mark: It might be fair to say that's a part of the big picture system in the overall business system, that many organizations didn't learn from it, if they were just doing production, Lean production, without looking at the Lean business system? Is that fair to say?

Pascal: Yeah, I think so. With the best of intentions, a lot of companies have sub-optimized. But it's not too late by any means. In fact, it makes good sense to learn the Lean system first in manufacturing, before you go upstream and downstream into the make and sell parts of the business, because this is a key point – in manufacturing, waste is usually visible.

Scrap waste for example in the auto business means a big pile of scrapped out car bodies.

Wise companies put them in a prominent place, so you walk by them every day and say, “Holy cow. Did we make those? Gee, we're going to do something about that.” By contrast, in business processes, planning and scheduling say, a bad schedule looks the same as a good schedule. There's no way of recognizing the defect waste. Similarly, a forecast; a bad forecast and a good forecast look the same.

In business processes, you can't see the waste as easily, so it makes sense to start in manufacturing but don't stop there. Go downstream into the sell and upstream into the make phases, as well.

Resistance to Standards Outside the Factory

Mark: One thing you touched on early in the book is some of the resistance. You start looking at applying Lean outside of the factory floor. There are all sorts of cultural challenges or people being afraid of being turned into robots.

What are some of your experiences about ways that listeners might be able to work past that concern, if they're hearing that in let's say sales and marketing of a manufacturing company, or if they're hearing that in healthcare or some other service setting that's clearly not a factory floor?

Pascal: Yeah, that's a great question and you're quite right; as you move upstream and downstream of manufacturing, you run into obstacles. On the plus side, the people are really smart. Once they learn the fundamentals and get past some of those obstacles, they take to Lean very, very quickly and happily.

Some of the obstacles are as follows. There is a fear as you say, that standards are straitjackets. My job as a designer or as an engineer or as a sales person will be devalued if there's a standard. A couple of points there – we have to apply Lean fundamentals with finesse and intelligence, when we get into knowledge work, and recognize that there is a high element of artistry in jobs like sales, or surgery, or teaching, or interviewing somebody.

There is an element of artistry. That's not to say we can't apply standards. We can, and we are very successful with them. But we have to have finesse. For example, in a surgery we work with the surgeons to identify the 10 critical elements. These things have got to be there in order for us to do an effective surgery. The surgeons figure out what the content of the work is, but we trust them to make decisions on the fly.

If there's a hemorrhage, you expect the surgeon to skip steps three and four. That's what you want. You don't want them robotically to follow this sequence.

Similarly, you don't expect a teacher or a professor to robotically follow an agenda. If there's a great learning opportunity, they can implement a teach back, or a group activity or a case study, or tell a story. That's what makes for a great surgeon, or a great interviewer, or a great teacher. That's a core obstacle.

Another obstacle to moving Lean outside the factory is, as I said, waste is invisible outside the factory usually, so it's much harder to see, and to begin problem solving.

A third obstacle is, in many areas outside the factory, there isn't a history of kaizen, or an expectation of kaizen. In the factory, people know, every year we got to get a little better, and we've got, probably, 20 years of experience.

That may or may not be true in your marketing shop, or in your design shop, or in your sales or customer service area. You've got to germinate the soil so that kaizen can take root. But the people are very good at that, so they usually pick it up pretty quick. Again, finesse is the key.

Standards, Improvisation, and the Orchestra Analogy

Mark: I like the way you put that, having the finesse to help explain to people the idea of flexibility. What you described, clearly, does not sound robotic, that having a standard plan doesn't mean zero deviation from that, regardless of what's happening around you.

Maybe a final question just on that thought. What was your experience? Even in a production setting, one challenge is that a lot of people hear about Lean manufacturing. They've never been in a factory, so it's hard to translate. They think, “Ugh, a factory. People are robots.” But it seems in a good Lean factory, that's not the case. Would you agree?

Pascal: You're absolutely right. A good Lean factory, or a Lean surgery, or a Lean law office, or a Lean design shop is a place where you riff. I'm a musician, so the standards for me – the sheet music, or the scales – are just a foundation for creativity. Without the sheet music, and without practicing the scales, you can't really do anything creative. All you create is noise.

The best factories that I've had the privilege of working at are like orchestras. In an auto plant, stamping, welding, paint, plastics, assembly are like the woodwinds, the violins, the tympani, etc. They're working together with a rhythm called “takt time,” and they're always getting better, because takt time and all the other Lean concepts make problems visible.

They're riffing all the time. It's not at all robotic. In fact, it's the opposite of robotic. It's one of the high points in my career, is being part of companies that are able to do that.

Mark: You mentioned a tympani. I used to play in orchestras. I'm a percussionist.

Pascal: [laughs]

Mark: There's classical music, where the sheet music is what it is. As an individual performer, most conductors would not want you improvising. But the conductor has a lot of leeway. If you hear the same symphony performed 10 times by 10 different symphonies, you're going to hear different tempos. You're going to hear different interpretations of that music.

Then if you look at, say, jazz. I mean, that still has structure. People who don't know jazz might think they're being completely free-form, and completely making it up, when most jazz compositions have a structure that you improvise within.

I don't know if I'm butchering the analogy you were beginning, but different settings have a different amount of improvisation built into the structure, and the expectations that people working in that system might have.

Pascal: Exactly right. The amount of improvisation, or the amount of kaizen, if you will, on a given day probably depends on the nature of the industry. Off the top of my head, if the situations are life-and-death, you probably want to stick pretty close to the fundamentals. In a surgery, you better make sure the critical 10 things are done.

In sales, though, it's not life or death, so you might be able to riff a little bit more. That's not to say that in a surgery, once you've completed the work, you have a debrief, you identify opportunities. It's not to say that you're not going to implement them, but in the heat of the moment, you probably will be less likely to completely riff.

The point is that standards do not constrain creativity. They allow creativity, both in the work, and supporting the work.

Another metaphor I use…Imagine the Rolling Stones. They're, like, 149 years old now, and they're on tour again. How do they do what they do? Can I suggest that they are surrounded, protected, supported by standards.

For example, they're doing 200 dates in a given year. I assure you there is a standard way of unloading the trailers, and setting up the stage, and doing the sound check, and tuning the guitars, and keeping track of Keith, etc. They're nestled and protected by standards.

Even within the performance, they have all the stuff we talked about, the sheet music, and the scales, etc. They may alter their performance. A given song will probably be done different in Rio de Janeiro than in Minneapolis. That's entirely right. A different atmosphere, a different air, a different audience, you're likely to react, and riff, or kaizen.

But standards, still, are the foundation of what the Rolling Stones, or the Chicago Symphony does – or a great factory, or a great design shop. It's all the same.

Mark: There's a lot of great points on the subtlety and maybe, as you call it, the finesse of the Lean approach, and the Lean philosophy in how to help transform an organization. A lot of that can be found in your earlier books, Andy and Me, Getting the Right Things Done, and more so now in the new book, The Remedy.

I want to thank you for joining us. Maybe some closing thoughts, Pascal. If you could remind people of the full title of the book, different ways that they can purchase the book, and find you online.

Pascal: Thanks, Mark. It's always a pleasure chatting and working together. The book is called The Remedy: Bringing Lean Thinking out of the Factory to Transform the Entire Organization.

I had a lot of fun writing the book. Hopefully, it will be helpful to people. I'm very much obliged to you for the invite, as always.

Mark: Sure. Happy to have you. If people want to find you online with your general website…

Pascal: Thanks for reminding me. As a matter of fact, we have a new website, which I'm very proud of, www.leanpathwaysinc.com. We've got all sorts of neat stuff there. All sorts of downloads, and educational materials, and teaching aids, and a bunch of other useful stuff. Do feel free to partake.

For listeners, good luck with all your activities. Just keep going, and getting a little better every day.

Mark: Thanks for those thoughts, and sharing your time with us. Pascal Dennis, our guest today. Sorry it's been so long. Hopefully, we'll have you back on the podcast again. There's an awful lot we could talk about.

Pascal: That would be great, Mark. Thank you so much.