Exploring the power of Hoshin Kanri—a strategic management system that sets mid- and long-term goals, aligns objectives across all levels of an organization, guides annual execution, and develops people’s capabilities to sustain progress. Mark Reich brings insight from his 23 years at Toyota, where he helped implement this enterprise-wide approach to continuous improvement.
Chapters
00:00 … Intro
01:52 … Hoshin Kanri
03:43 … Hoshin Kanri vs. Traditional Strategic Planning
04:42 … Mark and Toyota
06:22 … PDCA: Plan-Do- Check-Act
09:33 … Hoshin Kanri Implementation Challenges
11:57 … The Problem with Siloed Metrics and Incentives
16:03 … Building Ownership
18:16 … Core Components of Hoshin Kanri
21:40 … Hoshin Kanri Across All Industries
25:37 … The Top-Down Cultural Change
27:46 … The Secret Sauce
30:17 … Get Started!
31:35 … Lean Enterprise Institute
33:05 … Get in Touch
34:55 … Closing
Intro
MARK REICH: But leaders are people, too. They need development. In many cases, they’ve come up through a career where they’ve excelled, perhaps in their specialty. They may not have the leadership capability they need. Hoshin kanri, the mechanism of that should be looked at as a way to develop leaders in the organization. And so, you need some supporting mechanisms to ensure that those things are nurtured.
WENDY GROUNDS: Welcome to Manage This, the podcast by project managers for project managers. I’m Wendy Grounds, and in the studio with me is Bill Yates. We’re so glad you joined us today. We are looking into the transformative world of hoshin kanri. It’s a strategic management approach that aligns teams and drives continuous improvement. And we’re joined by an expert who has spent decades helping organizations navigate this process. We’re unpacking insights from his book “Managing on Purpose.”
Now, our guest is Mark Reich. He’s a seasoned expert in lean management and strategy. He has a career spanning over three decades. He spent 23 years at Toyota, beginning in Japan where he played a role in overseas product planning. This was during the time when Toyota introduced the Lexus to the world. He returned back to the U.S., where he worked at Toyota’s supplier support center, helping extend the Toyota production system beyond manufacturing into healthcare and nonprofits. Later, as part of Toyota’s corporate strategy group, he managed the North American hoshin kanri process during a period of rapid growth.
Since 2011, Mark has been with Lean Enterprise Institute, serving in leadership roles and coaching organizations in lean transformations. He talks a little bit more about that in our podcast, but I’m going to hand over to you, Bill, to talk about hoshin kanri.
Hoshin Kanri
BILL YATES: Yeah, so just delighted to have this conversation with Mark and learn more about hoshin kanri. One thing you’ll hear is we’ll refer to PDCA in this conversation, the Plan-Do-Check-Act model. It’s really a foundational model that we refer to a lot in Velociteach in our training. And hoshin kanri is a process that supports long-cycle PDCA. So, it’s embracing the Plan-Do-Check-Act approach from the very top to the very bottom of an organization, and from the very bottom to the very top. But PDCA was known as the Deming cycle back in the 1950s in Japan. That’s when Edwards Deming went after World War II to help rebuild Japan.
And I’ve read a lot of books on Edwards Deming, and obviously he’s had a huge impact on project management. And the influence, the impact that he had on Japan in helping them return their economy, you know, it’s hard to overstate it. So, the PDCA process that was the foundation of his training in the 1950s, he taught that in a four-day workshop to 10,000 people a year for 10 years. So, Deming influenced over 100,000 leaders in Japan and worldwide.
In the 1980s, the USA, we good old USA folks finally woke up and said, “Hey, there’s value in that. Yeah, we want that, too.” Another way that Mark describes hoshin kanri is he calls it a structured application of PDCA to the macro level of an enterprise. And it requires collaborative planning at all levels. But yeah, that’s kind of the basis for the hoshin kanri process that we’ll talk further with Mark about.
Hi, Mark. Welcome to Manage This. Thank you so much for being our guest.
MARK REICH: Thanks. It’s great to be here.
Hoshin Kanri vs. Traditional Strategic Planning
WENDY GROUNDS: We are excited about this topic. And I think many people might be unfamiliar with hoshin kanri. Can you explain what it is and how it differs from traditional strategic planning?
MARK REICH: Sure. I’m going to pull my definition out of a book. I recently wrote a book about it, and I know we’ll talk about that today, called “Managing on Purpose.” And that’ll maybe give people a context. So, listen in.
Hoshin kanri is a management system for strategy that defines mid-term and long-term direction, both the objectives and targets, and annually builds alignment vertically and horizontally to the direction, manages annual execution to the direction, and develops capability of people throughout the organization. So, I realize that is a bit of a mouthful, but I think we’ll probably get into more depth about some of the details of that. That’s what I learned it to be in Toyota.
Mark and Toyota
BILL YATES: Talk a bit about your experience with Toyota. That got me so excited when you said, “Yes, let’s have this conversation on your podcast.” Tell us more about your experience with Toyota.
MARK REICH: Sure. I spent 23 years working for Toyota. I now work for the Lean Enterprise Institute. We’re a nonprofit institute that was set up in 1997. I’ve been there 13 years; but prior to that, I spent 23 years working for Toyota. I ended up in Japan in the ‘80s, mostly because, if you have any listeners that were around in the job market in the early ‘80s, it was a lot worse than now.
And so, the American economy was struggling. Japan was booming. I decided to see if I could do something there. I ended up going to graduate school in Japan, learned the Japanese language, and Toyota hired me out of there. I didn’t know anything about the automotive industry when I went into Toyota there. I worked six years in Japan in a group product planning that planned vehicles for overseas markets. I worked a lot with the chief engineers.
I moved back to the U.S. then and spent about 10 years in an organization called the Toyota Supplier Support Center, which is an interesting group that Toyota set up in North America to help North American companies implement the Toyota production system, lean. So, I spent a lot of time in the field helping organizations like that. And I also spent, maybe most relevant to our topic today, I was transferred during the course of my career to our North American Corporate Strategy Group as the general manager executive responsible for running corporate strategy and hoshin kanri in North America for Toyota. So that kind of was where I got that deep experience in this topic.
PDCA: Plan-Do-Check-Act
BILL YATES: That’s awesome. And Mark, one of the things that I deeply appreciate is you’ve seen hoshin kanri from the grassroots level, like when you joined Toyota, and then, you know, obviously through your career you continue to go up, up and up and have greater exposure to it. To me, that’s some of the depth that I saw in your book. You described this as the process that supports long-cycle PDCA, the Plan-Do- Check-Act. So just tease that out a little bit more for us.
MARK REICH: Okay. Well, I kind of gave you the high-level definition so maybe break that down a little more. You know, I’ll explain this from what I learned in Toyota. I learned it by doing it, and then I was given the responsibility to manage the process. But fundamentally what Toyota does, like many other companies, it develops – part of its hoshin process is developing a longer-term vision for the organization, defines the direction the company wants to go. There’s a lot of inputs to that, of course, like the study of the market forces. And of course, in the automotive industry that’s a fairly complex world right now with, you know, you have auto driving vehicles, you’ve got electric vehicles, various technology being introduced. The market’s in a real interesting state. So, all that stuff gets considered.
You know, you want to think about, like, what’s the current situation with your customers, your other stakeholders. And then based on that you can define a long-term, like, vision for the organization. But where other companies that I’ve been exposed to seem to struggle is taking that and executing on that. And that’s where hoshin kanri is really actually exceptionally helpful. Meaning how do we take that longer term vision and make that into some practical, what we call hoshin objectives or annual objectives to focus the organization maybe on three to five things that we’ll do for that year. And then how do we build, back to your point, Bill, about the PDCA, how do we build a cycle of planning that’s effective, like what we’re talking about right now.
But then based on that plan, how do we execute on it, the actual doing of the plan, and confirm how we’ve done, reflect on that. And then review, like, for the next year, have we made progress to our vision? Should we continue as we are? Do we need to change objectives? Are there things that we’ve accomplished that we can move off the plate of leadership to be handled more by daily management or other areas in the organization?
And so, you know, and maybe just one of the things about the whole PDCA, like where did this come out of? I mean, a long time ago in the ‘50s, when Japan was struggling with quality themselves, Edwards Deming, very famous figure in the management thinking world, came to Japan and helped a lot of Japanese companies get started.
And Toyota is one of those key organizations that decided to take that thinking and really make it a corporate-wide process. So, it engaged, not just quality in production, but quality and thinking and PDCA across all planning functions, as well. And that’s where hoshin kanri was kind of birthed out of that is how can we build PDCA in all areas of the business?
Hoshin Kanri Implementation Challenges
WENDY GROUNDS: Let’s talk about some of the challenges that organizations might face when they are clarifying the strategy and the objectives, and they want to implement hoshin kanri. What are some of the challenges that you’ve seen?
MARK REICH: Well, let me frame that answer to that question by talking a little bit more about what I saw when I came out of Toyota. You know, I’d done this work in Toyota. And based on that definition I just gave, it was this fully embodied and well-structured management system in Toyota that developed capability of people as a primary focus, too. And then when I left Toyota and came to the Lean Enterprise Institute, I mean, a lot of organizations started to reach out to us because they knew I had this experience in Toyota, and they wanted me to come and see their company.
And honestly, what I saw a lot of times was a vision, many times it’s been created, but it was lost in some PowerPoint deck, or at best it was up on like a poster on a wall. And there was no, like, structure and management system to take that and make it into an actionable plan. So that was one struggle. Organizations that I’ve seen don’t have a mechanism. You need a management system to do that. You can’t just, oh we have this great vision, everybody like figure it out.
I think another struggle is that organizations struggle with alignment. And that’s vertical alignment and horizontal alignment. And they’re two very different things. The vertical alignment component is – kind of builds a little bit on what I was just saying, even if you get some consensus at the top on what are some of the key objectives for the year and how might we go about accomplishing those. In the book I introduced a framework for that, like how you define activities to support those objectives. That’s still pretty high level. I mean, you have to break down and problem solve in the organization and get input from within the organization to see how to execute on those.
And so, part of the beauty of hoshin kanri and the vertical alignment component is, if you do that, people actually up and down the organization become engaged in the work of the future of the organization. You know, we spend, what, a third of our lives, like, working. You want to know that the work you do contributes to the organization you work for. So hoshin allows you that breakdown to help you understand, to clarify that. I think many organizations don’t have that mechanism. So that’s a challenge.
The Problem with Siloed Metrics and Incentives
But horizontal alignment is another challenge because often what I’ve seen in organizations is their setup. Organization I just visited this week, a healthcare system setup based on some metrics and scorecards where executives are just kind of held accountable to a number. And often that number creates a little bit of a siloed mentality. Like if you’re the vice president of production, let’s say you have to deliver some cost reduction or some output or productivity number that doesn’t necessarily align across the organization with the needs of the entire organization. So, one of the things is how to build that horizontal consensus across the organization. And I think hoshin helps you do that. Those are a couple things.
BILL YATES: Yeah, Mark, those are such good ones. And there are several in the book that you go into. The last one that you mentioned I think is so key. It is, it’s disruptive for an organization to embrace something like this if they do have silos like you’ve described. Or they may say, “No, no, no. We’re not siloed. We communicate really well.” Okay, that sounds good. But let’s talk about, the metrics or the incentives that different department heads have for them or for their group.
Because it may be that if my incentive, my performance incentive or that of my group depends on productivity, and I know, okay, if I spend the time to share this information or to cross-communicate with these other departments, that’s going to cut away some of my time that I have for coding or testing or developing, whatever it might be.
So, you’re right. You really have to embrace that from the top and say, okay, as we embrace and start to adopt these techniques in this process, what are some systems we have in place right now, whether it’s incentive systems or metrics, things that we’ve always said are important, that we need to challenge and say, okay, does that put us in a mentality where my group is going to be resisting this alignment and collaboration because we don’t have incentives that align with that? Yeah, I could see that being a pretty big disruptor as people or organizations try to embrace and pivot to hoshin kanri.
MARK REICH: Yeah, and there’s a couple of dimensions to that, Bill. I mean, I would say at a corporate level, if you’re defining what the corporation needs to do, I like to think like you can bucket that down like three to five things. I ask organizations to keep it a small number. Otherwise, so many companies have like 40, 50 things they’re trying to work on. A concise number. At a company level, you can’t bucket them into a silo.
In the book, the example that’s used as the case study is the lawnmower company that’s struggling to get one of their challenges. They have many, but one of their challenges is to get into the electric lawnmower market. They don’t have a market. They don’t have an electric mower. Well, you can give that assignment to product development, but you have to make it.
BILL YATES: Yeah.
MARK REICH: And you have to market it. So that spans the whole organization. So how do you overcome that challenge I think is a key area that companies, I believe, often kind of struggle with is how to bring that together. And so hoshin can help you with that. And you can put in place management mechanisms to define clearly what support you need. But I think the incentive part, too. I mean, in Toyota, it’s kind of an incentivization, not just around, like, financial incentives, but like how people are incentivized to behave. And what we tried to engender in Toyota, you want to engender thinking for leadership around, like, promoting people who lead by responsibility, not by authority.
You know, if you’re somebody’s boss, I mean, it’s your job often to tell people what to do. I don’t want to say it’s easy, but it’s simpler. It’s simpler than if you have to work across an organization and pull in other stakeholders and get their buy-in that don’t report to you. It might be your peers, could be even people that are above you. I think that that kind of forces a leadership behavior in people that I saw demonstrated in Toyota many times. And I actually see it actually in many good organizations. And I wish more organizations promoted that.
Building Ownership
BILL YATES: You talked about ownership. And I’ve always looked to Toyota as one of the leaders in terms of pushing ownership down to every level within the organization. And you know, that gets back to some of the assembly techniques that they’ve come up with and really revolutionized.
But ownership is so important. And then the incentives that I have, if I’m owning something, if it’s a part of this process, then I’m responsible for success or failure in, not just my personal, but my team and our organization’s success or failure. And then we’re linked together, like a sports team or some other group, to really push for success and try to push through some of these barriers that we may have set up to reach that level of performance that we want to reach.
MARK REICH: Yeah, and I think, you know, I’ll just reiterate a little bit what I said. You need a mechanism for that, a deliberate mechanism. Meaning that, to your point, building that ownership, if you develop some high-level objectives for the organization. Yeah, that’s great to define like at the corporate level what has to get done.
But if I’m a manager in – let’s use the lawnmower example from the book. If I’m a manager in product development that has to help develop this electric mower, I need to understand, like, what is my specific responsibility related to that? And so, what hoshin allows you to do is to take that corporate level and break it down to a departmental level, and then define some key, like, objectives and activities for the people in the middle of the organization, all the way down to frontline problem-solving; okay? So, the problem with the mower. Why are we not able to take this prototype to production? There are many factors that come into play potentially. But those problems can be worked on by people in the organization.
And clarifying each individual’s, like, role and responsibility and problem to be solved I think is a – it’s an important part of engagement, is an important part of development. It’s an important part of, like, execution because ultimately the problems exist in the work. They actually, the problem is to achieve the business results that exist in the work. So, if we want to get the business results and engaging people to do that, you’ve got to break down the problems in the organization and give them ownership.
Core Components of Hoshin Kanri
WENDY GROUNDS: Mark, can you step back and just walk us through the framework of the core components of hoshin kanri that you’ve outlined in your book?
MARK REICH: Yeah, so we’ve been talking a little bit about some of them. I mean, the book basically is set up with how companies can get started doing this. And then we go through the case study, and it’s a year-long, year-and-a-half-long journey of a company that’s starting to do hoshin kanri. And I recommend upfront that organizations, they try it in one area of the business. I kind of refer to that as model line thinking, but like let’s create like a pilot, a model where this can be successful.
And it depends on the size of the company. I’ve worked with small organizations. I mean, you’ve kind of got to tackle the whole organization. I’ve worked with multi-billion-dollar companies that probably it’s better to take it to a unit or a business unit and try it. But then, you know, you kind of get going by thinking about like, how have we done so far?
I was actually with a healthcare system this week where every kind of business unit was reflecting on how did we do so far? Before they even implement hoshin kanri, like almost every organization has some things they are supposed to achieve in every function. So how did we do in those? So, reflection is really important. You want to start to build muscle around how people look back at and understand how well they did versus what they expected to do.
And then, you know, in the PDCA cycle, you start to get into thinking about what are some of the key factors that are inputs that are required for us to develop a good, like, hoshin for the year. And those can be things like market forces, the customers, things like that. Evaluating those and determining among the team what do you want to do? So that’s your plan.
Then, like I was talking about earlier, you can break that down within the organization departmental levels so that work becomes much more practical and specific. And then you execute on it. And the next part of the, you know, the other key component is that how do you review that regular, like, pace, that cycle of execution? I refer to what’s called an “Obeya” in the book, which is just a translated – it’s a Japanese word to translate to “large room.” But make it visual because this is a long-term process. It’s hard to see progress. You want to catch issues quickly. So set up a review process on a monthly basis that sees how you’re doing.
Then at the end, at some point you want to go back and review, like, is the market still what we expected it to be? Are we on track with what we planned? How are our capabilities? Are we struggling in certain areas of the business and our plan? And then finally, like, how did we do? There needs to be an evaluation mechanism at the end. So, like, it could be a numbered mechanism, whatever. But versus the objective and targets you set for the hoshin and your plan, did you accomplish it? For those things that you’ve accomplished is another key component. You want to move those to daily management. Organizations end up with 30 or 40 things because they never take anything off the plate of leadership.
So, if we’ve accomplished things, move them to daily management. If not, we may need to continue, but we also need to look at, you know, it’s been a year. That things change. A lot could have changed in a year. And so, let’s look at what we need to adjust, we need to add to our plan. So, I hope that answers your question.
Hoshin Kanri Across All Industries
BILL YATES: It does. There are so many rich points in that. The role of reflection and looking back at the end of the year, I thought you really – you made a strong point for that in the book and with the TrueMowers. That’s the name of the company, right, for the case study, TrueMowers?
MARK REICH: Yeah, TrueMowers. That’s just a made-up name.
BILL YATES: Yeah, yeah.
MARK REICH: This is not a real company.
BILL YATES: Yeah, yeah. But that was something important for them. And it’s such, it’s a natural, that’s something that’s very natural to me as a project manager to think, okay, we do need to stop. We need to reflect. We need to do a lessons learned and see how we can improve.
One thing I want you to speak to, Mark, is yes, it grew out of manufacturing, obviously. You go back to Deming, you go back to the ‘50s, and you look at Toyota, you know, its assembly and manufacturing. But to your point, you’ve just been working with the healthcare system this week. Talk about how this process, this approach goes across all industries.
MARK REICH: Thanks. Good question. Point of note, I mean, I’ve been working in just about every industry as it relates to TPS or lean as overall because I think it’s applicable in just about every industry. It makes businesses, people’s lives better. But, you know, specific to the topic of this book, hoshin kanri, over the last eight to 10 years, I had the opportunity to apply it in manufacturing, construction, healthcare, the hospitality industry. I’m currently helping a company in India in the software industry. So, it can work across any industry.
And so let me just give you an example from construction. I worked with the largest construction company in the U.S. Actually, we’re still working with them. They’re about a $25 billion company. One of their largest business units is in New York City. And so, if you ever go to New York City, look at the skyline. They build big buildings. They’ve built about half of the skyline of Manhattan. They also built Yankee Stadium. And I can say their name. They’re a case study in the book, actually, Turner Construction.
So, they determined they wanted to try lean and hoshin kanri. And the top leader of that business unit in New York, senior vice president, responsible for about 1,500 people there and about $5-7 billion worth of business, took it on with his leadership team. So, when they first started, they kind of picked some of these true north things that they thought they wanted to do in the organization, like engage people more. And they realized that wasn’t really so strategic. So, Charlie, who is the head of the organization, the senior vice president, decided he really wanted the organization to focus in on a couple, like, really important things. Like back to my three to five. And that number one thing that he chose as their top priority was safety.
Now, if you know anything about the construction industry, it is an industry that struggles with safety. I think around 35% of workplace deaths across all industries happen in the construction industry. And so, Charlie believed that they could tackle that problem.
So, they created a hoshin to focus on how, with very specific activities, to focus on how to address workplace safety in New York City. And at the time they were one of the, like, worst performing business units in Turner. And now they’re the best performing business unit in Turner because the leaders focused on, not only putting together a plan, but they hadn’t really been out enough at the job sites to see, like, what safety issues are actually occurring, and reinforcing that behavior, and the importance of safety at job sites.
Because often, you know, when you’re building a building, you’ve got a deadline to get it done, and safety is sometimes secondary. And Charlie, he set up the whole problem-solving methodology about it that kind of pushed the organization to solve, when a safety incident occurred, it got solved really quickly to root cause. And that was shared across the organization.
The Top-Down Cultural Change
BILL YATES: You know, one of the things we were going to ask you about was cultural change. I think you’re hitting on it right there. How do you see that flow from the top, using this process, down to where the guys are doing the work?
MARK REICH: Yeah, so that’s really important. I mean, I’m not a person that says we can just blame all the problems on this top. But I do believe for this effort it requires engagement from the top. You know, one of the fundamental things I learned in my career at Toyota, and I’ve tried to impart to organizations outside Toyota, I think the ones that are successful is that you’ve kind of got to flip the pyramid. You know, the typical pyramidal structure where the top management is up there on top. In Toyota, people at the top are the people who are providing value to the customer.
So, I often mention this, but when I joined Toyota in Japan, my first three months in the company I built cars. And Toyota did that for everybody in the organization, and they did that because they want you to know, whether you go to finance or HR or wherever you go, that those are the people that add value, and that that work’s really hard.
So, the same thing I was talking about just now with Turner, I mean, they needed to get out and see. It’s easy to blame people for safety incidents. It’s actually a common thing that it’s the guy who – you a violated a rule. So, it’s a person who’s the problem. But there are many inhibitors to doing safe practices in how the job is organized, how the job is structured, what the work is. And so, leaders have to get out and see that. We call it “going to the Gemba.”
Gemba is the frontline work. I’m speaking in this case construction site. In a hospital, it could be the emergency room. In a software company, it’s inside the computer. But that’s the frontline work that people are doing to try to deliver value to the customer. You know, people are out there building a building. That’s what the customers – they’re paying for the building. And so, leaders have to be out and understanding the issues in that work. I think that’s a big cultural shift. So, it’s not just merely making a big plan up at the top. Part of this is leaders getting out. And this was a big change in Turner, when the leaders started to go out and actually see, like, the issues that existed and not rely just on what you hear from reports from the middle.
The Secret Sauce
BILL YATES: That’s huge. In the book, you talk about half a dozen enablers for success in taking on hoshin kanri and really changing how your company does business. I think we’ve touched on most of those. They’re so important. And some of them are outside of our control. You know, it’s like, okay, what if there is a merger? Or what if a leader is getting ready to retire or something like that?
MARK REICH: That’s true.
BILL YATES: So, you know, in terms of timing of adopting or the size of the rollout, those can be factors. But like if you step back, if I were to ask you, hey, what’s the secret sauce with this approach? What’s the number one factor? Which one would you pinpoint?
MARK REICH: That’s an easy answer. It’s developing people. You asked me a question about five questions ago. Where do I see the gaps in people? And I didn’t really get to that point. And so, this is a great opportunity. In Toyota, I mentioned, by definition, develops the capability of people throughout the organization. That was a primary purpose of the strategy and the use of hoshin kanri was development of capability up and down the organization, particularly the leader capability. Like we talked about, like, how to lead with responsibility instead of authority. That was key.
When I left Toyota, nobody talks about that when it relates to strategy. It’s just, in fact, it’s often more held like how do we hold leaders accountable?
I mean, yeah, they get paid, leaders. They should deliver, like, business results. But leaders are people, too. They need development. In many cases, they’ve come up through a career where they’ve excelled, perhaps in their specialty. They may not have the leadership capability they need. Hoshin kanri, the mechanism of that should be looked at as a way to develop leaders in the organization. And so, you need some supporting mechanisms to ensure that those things are nurtured. There’s a situation in the book where there is a plant manager who tried hoshin kanri in his plant. He seemed pretty, like, capable. So, the CEO elevated him a little bit to take on a corporate-level, a company-level objective. And he performed pretty well.
At the end of the book, not to spoil the ending, but he ends as a CEO. But those of you who get the book and read through it, I purposely put in points where the CEO takes time to mentor that person. And because initially he’s not accustomed to that role and working with people above him. And so, the CEO has to help him kind of like navigate some of that. All that stuff is intentional in this process.
BILL YATES: Developing people, what a great answer.
Get Started!
MARK REICH: And I would just say, you know, in some sense, this is a little bit of a high-risk activity for a company because you’re engaging top leadership and their time. And you know, leaders, I would say if there’s interest to you, try something. And it can be in a portion of the organization. Of course you’re going to need leader buy-in for that. But my inclination would be like, get started.
BILL YATES: That’s good. Yeah, one of the enablers, one of the keys to success is having senior management who’s all in on it. And you bring out in the book, okay, what if your CEO is kind of resistant to it, or doesn’t have time for it? You know, you can still try it. Just try it on a small scale. And make sure your immediate manager is approving.
MARK REICH: That’s right.
BILL YATES: And just, you know, and success breeds success. So, if this process starts to work at a small scale, people are going to notice in the organization, and they’re going to want to know, hey, what’s Mark’s group doing? What are they doing that’s different than what we’re doing? Can I come to some of their meetings? Or what’s all this stuff they have on the wall? You know, what is that?
MARK REICH: Right. Just to be clear, you need some level of scope for this to be effective.
BILL YATES: Sure, yeah, yeah, yeah.
MARK REICH: But a plant, plants are often pretty big size in companies, or a – like a healthcare system. It could be just one hospital, or a functional department could try this.
Lean Enterprise Institute
WENDY GROUNDS: Mark, totally changing the subject. Can you tell us what is the Lean Enterprise Institute? Just describe what you do.
MARK REICH: I’d love to do that. We are a 501(3)(c) nonprofit educational research institute set up in 1997 by a gentleman by the name of Jim Womack, who became pretty famous. He came out of MIT. He was actually commissioned by the government to do a study in the ‘80s of the automotive industry. And he did that globally. And when he did that, he found out there was this one company that was just better in every metric around cost, quality, productivity. And that was Toyota.
So, he wrote a book called “The Machine That Changed the World.” And that book became very well known in the automotive industry because it kind of revealed nobody really knew much about Toyota up until then, and the Toyota production system. And then he became pretty famous as a result of that.
Jim is kind of a missionary. He’s still very active in our institute. He’s 76. And he’s still out in the world, helping spread this thinking. But he set up our institute really to make things better through lean thinking and practice, which means just what we talked about earlier, which is how can we provide the highest value to the customer with the highest quality, lowest cost, in the shortest lead time. And it turns out you can apply that thinking to just about any industry. That’s who we are. We’re a pretty small organization, but pretty influential in our space. Thanks for asking.
Get in Touch
WENDY GROUNDS: If our listeners want to get in touch, or if they want to find out more about what you do, where’s the best place for them to go?
MARK REICH: First of all, go to our website, Lean.org, L-E-A-N dot O-R-G. If you have any interest in business improvement, or lean as a topic, they’re just a treasure trove. You know, we’re a nonprofit, and our mission is to provide learning to the community. Of course, you can buy my book there. Love you to do that. That’s Lean.org/mop. There’s a lot of free information there. And this is over several decades. We’re almost 30 years. Free case studies, free articles that you can learn about different aspects of lean thinking and practice.
BILL YATES: Outstanding. Well, on a personal note, when I was looking at TrueMowers…
MARK REICH: Yes.
BILL YATES: Just a deep respect for what you did there. It’s hard. You know, I’ve had, just in writing content, I’ve come up with case studies before. Oh, man, yours is deep. It’s rich. And it’s like you’ve written a good piece of fiction that happens to teach really well. Good job with that. That’s difficult.
MARK REICH: Thank you.
BILL YATES: That’s really tough.
MARK REICH: It’s based off some sweat and tears. I mean, that’s an amalgamation of my experiences in many organizations.
BILL YATES: Yeah, yeah.
MARK REICH: Thank you very much for that.
BILL YATES: Yeah, that’s really, my hat’s off to you. Mark, thank you so much for your time today. This was a treasure for me to be able to talk with you in depth about some of these topics and get into this process that can really change the way a corporation functions. And what I love about it is it can make people happier at work. And to your point, that’s a lot of what we do is we spend our time awake working. So why not enjoy it? Why not be more productive? Why not feel like we’re making a difference, and we’re connected and aligned with others in our organization? And that’s what this process is all about. So, thank you.
MARK REICH: You’re welcome. Thank you. I appreciate the questions. It was great being here.
Closing
WENDY GROUNDS: That’s it for us here on Manage This. Thank you for joining us. You can visit us at Velociteach.com, where you can subscribe to this podcast and see a complete transcript of the show.
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