Episode 153 - Numbers and Balance

I’m David Veech and this is Elevate your performance. 

 

A few months ago, I stumbled onto a little article about numbers and numerology.  As I was reading through what they said each of these numbers meant, I kept drawing connections with leadership.  Weird, I know. 

 

Through much of last year, I’ve been reflecting on balance in all things.  This is one of the keys to lean thinking and making a workplace more productive.  Everything naturally strives for balance or equilibrium.  When things are out of balance, it creates stress on the system or on the human.  We can feel it when we’re out of balance.  Entrepreneurs and many other leaders often dedicate enormous energy to their work, sacrificing balance in the pursuit of success.  But how do you get someone who really loves what they do to take a vacation? 

 

So what does balance have to do with numbers?  I started thinking about how certain numbers can illustrate balance.  Think about just the numbers 1 through 9.  If we use dots to represent numbers you’ll notice that odd numbers each have a center point with an equal number of dots on either side.  With a little push, you can see that these look like scales that are perfectly balanced.   

 

That made me dig a little deeper into those odd numbers and what numerologist say they mean.  Keep in mind, I’m not an expert numerologist.  I don’t even know how a number comes to be associated with a person.  I’m looking for something that might be catchy enough to help me lead leaders to become more effective. 

 

That’s all I have time for this morning.  Over the next couple of days, I’ll share more insight into what I discovered and how I have been able to tie everything back to my 3 key insights for leaders - Love, Learn, and Let go. 

 

Have a great day and I’ll see you tomorrow 

 

 

Episode 148 - Post-War Labor disputes in Japan

I'm David Veech and this is Elevate Your Performance

I've been focusing these past couple of months on the historical activities that got manufacturing and business to where we are today.

I've been focused on Toyota lately because of the impact they have had on bringing improved methods to our attention.  After all, they are the Poster Child for Lean Organizations.

When I first started teaching TPS and lean, I read everything I could get my hands on about Toyota and lean manufacturing.  I learned a ton, but I wasn't always diligent about keeping track of what source said what thing.

The delays I'm experiencing this month are all related to research.  I've been re-reading those older works primarily in an effort to validate the truth of what I've been teaching.  Sadly, I've also validated that some points I make in courses I teach are wrong, historically.  

These would be details like lifetime employment contracts in Japan.  I was taught (again, I was remiss in keeping track of the source) that Japanese companies were ordered to provide lifetime employment contracts to their employees as a result of labor disputes and protests in 1950.  

This week, after re-reading Eiji Toyoda's Fifty Years in Motion, Taiichi Ohno's Toyota Production System, and a scholarly research article on Japan's Lifetime Employment, here's what seems to have really happened.

In December 1948, the occupation government, known as SCAP for Supreme Command, Allied Powers in Japan, imposed austerity measures to bring inflation under control in Japan.  The biggest piece was known as the Dodge Line, named after Joseph Dodge, chairman of the Detroit bank and special ambassador and financial advisor to SCAP.  

These measures fixed prices on certain products like trucks and passenger cars, but not on others, like raw materials.  Many Japanese customers suffered as they lost jobs, or their profits vaporized.  

Their inability to collect installment payments for vehicles they sold drove Toyota Motor Company and many others to the brink of bankruptcy, requiring them to secure significant loans that came with strict conditions on the operations of the company.

As the economy grew more volatile, the union movement in Japan flourished.  Initially, this was encouraged by SCAP until they learned that the largest union was backed by the Communist Party.

To meet the regulatory requirements and to survive, Toyota was ordered to reduce its labor force, already relatively small compared to their pre-war staffing, by 1,600 staff.   Toyota offered early retirement buyouts, but also were forced to reduce wages across the board by 10%.  As a result, Toyota President Kiichiro Toyota resigned from the company, accepting responsibility for the turmoil.

The same was happening to other companies as well and the labor unions exploded with strikes, protests, and often violence. 

The most violent labor disputes in Japanese history took place between 1949 and 1954, involving major companies, such as Toshiba, Hitachi, Toyota, and Nissan.  The working days lost in 1952 alone reached unprecedented 15 million days involving 1.6 million workers.

Lifetime employment was never mandated by the state, but as a long-time philosophy of Japanese employers, this was a goal that most large companies held very dear.  Japanese workers, accustomed to this, were particularly devastated when the staff cuts were required by the economics of the Japanese Market, pushing them into the streets in protest.

According to Ohno, a key goal Kiichiro shared with Toyota leadership was that Toyota needed to catch up with the productive capability (if not the volume) of US passenger car manufacturers within 3 years of the end of the war.  

In 1950, Eiji went to the US to study the automobile industry.  When he returned, he said he was asked "how long until we catch up with Ford?" 

 He answered that Ford was not doing anything that Toyota didn't already know about, 

but it is very difficult to say how long when you consider that Toyota's passenger car output at the time was a mere 40 vehicles per month, while Ford was making over 8,000.

Next up we'll touch on the birth of the quality movement and how Toyota was able to respond to the 1973 oil crisis, which is the event that actually made people start studying how Toyota was doing things.

Have a great day and I'll see you soon.  Don't forget to subscribe!

Episode 147 - Kiichiro Toyoda's challenge to his team

I’m David Veech and this is Elevate your Performance.

Post WWII, Japan was under the control of the US Military.  Our objectives were to remove war-making capability from Japan, and to restore it’s economy so it can rejoin the world in open trade.

Dozens of measures were put in place that would freeze prices on most commodities, and remove subsidies the government had been paying for critical raw materials and resources like coal and iron.

These economic controls, along with breaking up of Holding Companies in an Anti-monopoly measure, had a devastating impact on Japanese manufacturers, and Toyota was no exception.  This move effectively stripped Toyota from its sales organization.  To keep people working, including the returning soldiers, Kiichiro launched several other businesses, from a chinaware franchise to fish paste, to clothing and dry cleaning. 

To relaunch the automobile business, Kiichiro first had to study what was happening elsewhere.  They had time, since Japan was not allowed to produce cars immediately after the war, and the volume of trucks and busses it was allowed to produce was too low to fuel any growth.  He sent people to the US and to Europe to study the post war automobile business and learned that they would need to improve productivity significantly to stay in that business.  His 4-point plan for recovery included:

1. In order to repair and renew machinery that has undergone heavy use or deteriorated, establish a Temporary Reconstruction Office to comprehensively promote the restoration of the plant's equipment.

2. Change the company's parts manufacturing policies to establish and develop a specialized parts plant equipped with independent capacity.

3. Implement improvement and remodeling of the company's vehicles (which was stagnant during the war), plans for design changes, and establishment of a system for the steady supply of previous model parts for repairs.

4. Change from a company that supplied and maintained automobiles under a controlled economy to establish a sales system that will better and more fully reflect users' wishes, requests and opinions.

The overwhelming concern Kiichiro expressed was toward the livelihood of his people.  His efforts to create work for people and to focus on food, clothing, and shelter, produced some moderate effect and some businesses that still linger - including a business that makes prefabricated components for concrete houses.

All this effort still nearly failed completely when the Dodge Line came into effect in Japan.  This strict austerity initiative to control spiraling inflation, sparked a deflationary trend that resulted in some devastating decisions Kiichiro would have to make.  

More on that when I see you tomorrow.

Episode 143 - Toyota in World War II

I’m David Veech and this is Elevate Your Performance

Best of intentions - I wanted to get back to daily production of these, but there are so many other things going on that I can’t seem to make the time to finish the research necessary to make these historical posts.  

I have been teaching a historical timeline for years.  These are all things that drove Toyota to create the systems  they created.  I point these out to tell people that applying lean thinking doesn’t mean you have to be exceptionally creative or innovative.  Toyota did the things they did out of necessity rather than innovation.  From the start, Toyota copied parts for Ford trucks and Chevrolet cars, but out of necessity built a system for delivering materials Just-In-Time using a Kanban system.

Access to raw materials and the industrial capacity to convert them into useful products is the winner of wars - This is what feeds the size and strength of the military.  This is what won the US Civil War, World War II, and the Cold War.  

Raw materials have always been Japan’s Achille’s Heel.  Raw materials drove Japanese colonialism in the 19th century.  The first Sino-Japanese war, which was 1894-95, was fought in Korea, with China losing badly.  As a result, Japan gained control of the Korean Peninsula, Taiwan, and the Liaodong Peninsula, which is where Shanghai sits.  This is where Sakichi Toyoda built a large plant to manufacture his automatic looms that I mentioned in episode 141.   

As Japan’s industries grew in the late 20s, materials ran short, so in 1931 Japan invaded Manchuria.  As China began to shift from provincial to National governance, Chinese tolerance with Japan’s interference vaporized and in 1937, Japan provoked China to war.  The Nationalist Chinese put up a strong resistance, drawing more and more resources from Japan.  Japanese atrocities from this war turned other nations in the region solidly against Japan and led to US embargoes of Japanese goods and eliminated US exports to Japan.  

Japan’s steel industry was small and dependent upon scrap metal from the US as it’s main raw materials, producing questionable quality in sheet steel needed for cars.  Toyota built it’s own steel mill but output from this was low.  When Japan nationalized for World War II, all raw materials were stockpiled by the military, which assigned them to companies to fulfill orders for trucks, airplanes, and ships.  

The peak production of trucks for Toyota occurred in December 1941, when they built about 2,000 trucks.  Because of scarcity of raw materials and constant reduction in manpower as men were called to the front lines to fight, their production levels continued to remain low. (From Eiji Toyoda’s Autobiography, Fifty Years in Motion.1985)

Toyota made it through the war largely undamaged.  One plant had been hit in a bombing run on August 14, 1945, just one week after Nagasaki had been destroyed with our second atomic bomb.  Toyota City was targeted for August 21 with a conventional bombing raid designed to reduce the entire facility to rubble.  But with the Japanese surrender on August 15, the war ended.

In the next episode, I’ll talk about peak production in the US during the war.  This was the truest lean production since the assembly line.  I’ll explain how we got there with a bunch of workers who had never worked in factories before.

Don’t forget to subscribe to my mailing list and my YouTube channel.  Connect with me on LinkedIn as well.  

Have a great day and I’ll see you tomorrow.

For more, see: 

1) https://slate.com/human-interest/2014/07/what-prompted-japan-s-aggression-before-and-during-world-war-ii.html 

2) https://www.toyota-industries.com/company/history/toyoda_sakichi/ 

3) https://www.toyota-global.com/company/history_of_toyota/75years/text/index.html

4) Toyoda, Eiji (1985), Toyota, Fifty years in motion

Episode 142 - Timelines for Toyota - Part 2

I'm David Veech and this is Elevate your performance.

With Sakichi Toyoda's death in 1930, his Son Kiichiro and nephew Risaburo were left to run his businesses.  As a result of a great earthquake in 1923, which destroyed significant pieces of Japan's railways, demand for automobiles soared.

Ford built a plant in Yokohama in December 1924, beginning production in March of 1925.  In 1927, General Motors began assembly operations in their plant in Osaka.  The surge of vehicles produced by these two plants effectively destroyed Japan's domestic automobile makers at the time.

It wasn't until 1933 that Kiichiro established an Automotive Production Division within the Toyoda Automatic Loom Works.  It began prototyping parts and designs which were reverse-engineered from a 1934 Chrysler DeSoto and a Chevrolet Engine.  Kiichiro had to establish his own steelmaking department as well, because their expected demand from existing steel mills was too low.

They purchased some machines, and converted others from the Loom works to begin making parts.  Kiichiro also sent an engineer to the US from January to July of 1934 to learn more.  That engineer visited 130 plants, 7 research facilities, and 5 universities to study the automotive and machine tool industries.

The Japanese government asked Toyoda to develop a truck as well, so Kiichiro bought a 1934 Ford Truck to use as the model, similar to how he used the DeSoto as the model for their first car.  That first car, the Model A1, was finally finished in May 1935.  The first truck prototype, the G-1 was finished in November that year.  Both were prone to serious defects.

With promising developments in the domestic manufacturing capability, the Japanese government changed the licensing rules, restricting licenses to manufacturers owned by a majority of Japanese citizens, effectively restricting Ford and GM from continuing operations there.  This, despite low output of the 2 domestic manufacturers, Toyoda and Nissan.  By September 1936, Toyota's volume had grown to just 100 vehicles per month.

In 1936, Toyoda hosted a contest to design a new Logo for the company, and changed the name from Toyoda with a D to Toyota with a T, as Industry leaders recommended.  People submitted 27,000 entries with the winner announced in the October 10, 1936 issue of the Toyota News.

They established the Toyota Motor Company in August 1937 and saw their dealer network grow to 22 outlets.  These dealers became significant investors in the new company.

We'll pick up here tomorrow and talk about Japan's entry into World War II.

Give me some feedback.  Let me know what you'd like to know more about.  Post a comment or send me an email.

Have a great day and I'll see you tomorrow.

https://www.toyota-global.com/company/history_of_toyota/75years/text/index.html

131 - Developments through the 19th Century

As we're moving through our American timeline from craft manufacturing to mass production, I've rarely studied the period between Eli Whitney's milling machine and Henry Ford's assembly line.

The 19th century seemed to hide great strides in manufacturing because of the magnitude of other changes.  

Most notably, the 19th century in America is about expansion and about exploiting rich natural resources.  In 1803 alone, we doubled the size of the nation with the Louisiana Purchase, but even in the east, in Virginia, Maryland, and Pennsylvania, Iron Ore was abundant and became a huge export for the US.

But it also provided rails to connect the expanding country.  Further deposits discovered throughout the great lakes region, with easy transportation routes on those great lakes, accelerated growth.  J. P. Morgan, then Andrew Carnegie were able to make great use of the Bessemer process to refine iron ore into steel.

We also saw the development and growth of the Oil industry as we learned how to refine the crude oil discovered in Pennsylvania.  J.D. Rockefeller built his first refinery in Cleveland and took advantage of the wealth he generated to consolidate hundreds of players in the oil business into Standard Oil.

Cornelius Vanderbilt created a shipping and railroad empire that enabled us to reach further westward toward our "Manifest destiny."

But it was our manufacturing capability that produced the iron, the drilling rigs, the mining equipment, the steamships, and the locomotives.  Our first integrated factory opened in 1814, a textile mill.  By the middle of the century we're a leading exporter of all kinds of goods.  

Of course, with all this prosperity on one extreme, the downside was just as significant.  The expansion of slavery, the Indian Removal Act, and oppressive working conditions are all dreadful events we wish we could forget, but we're compelled to never forget.  

In the second half of the century, new technologies emerged with the wider availability of electricity, which was a much better power source for equipment in factories, and the light meant we could now exploit workers 24 hours a day.  

Electricity, the telephone and telegraph, are two keys to the second major industrial revolution.  More on that tomorrow.

Have a great day and I'll see you tomorrow.

126 - Culture of Confidence

Good morning. I'm David Veech and this is Elevate Your Performance.

The term "High Performance Culture" has been in circulation for a pretty long time now with probably a dozen consulting firms offering strategies to create one.  Most of these are very good.  

What I want to do is to view the need for higher performance as a management-response problem, one that is created by leaders to take the organization to another level.  We'll have to define what we mean and how to measure it, and there are many components to this.

For example, at one client, they adopted an HPC that involved 15 key components, and many of them had subcomponents for further clarification.  It is an excellent package, but there weren't any measures of performance actually tied to HPC.  It was more of a "reminder" to leaders to behave according to the values described.

Based on my research, organizations want cultures of engagement.  They might call them Problem Solving cultures, or continuous improvement cultures, or even high performance cultures, but the desire is the same:  we want our people to show up, do good work, improve that work whenever they can, and achieve our goals.  So we have 4 key measurement areas:  Attendance, Productivity, Improvements, and Results.  But the way we measure and respond is far more important than what we measure.

Are we measuring these things at work?  Most places I've been aren't really.  But let's say we're not getting what we think we want.  If that's a problem, let's look at the root cause.  In the years that I've been working on this with people, I believe the single most important root cause for failure in all four of these areas is that our workforce has low self-efficacy for engagement.

Self-efficacy is the belief in our ability to influence events that affect our life and our sense of control over the way we experience events (Bandura, 1997). [From Self-Efficacy and Leadership Commitment During Lean Strategy Deployment by Angela D. Pearson. November 2019 PhD Dissertation.] 

Another way to think about it is our individual confidence in our ability to perform a particular task in a particular setting.  I think it is particularly relevant in a work environment.  Performing the work is typically taken care of during someone's on-boarding and on-the-job training.  

We expect people to have to work up to a level of competence over time.  But how much time to we spend reflecting on why that competence is really important?  In most cases, managers will tell you that competence is important only for how it affects the results; not how it affects the person.  

Competence is the most critical builder of self-efficacy for that job.  Competence leads to mastery.  Mastery leads to innovation.  When you're an expert, you don't burn cognitive energy on actually doing the work - you just work.  Your brain is free to think about ways to improve the work - but we, as leaders, need to make that a clear expectation.  We want you to achieve a level of competence because it will allow you to find better ways to work and that benefits both the worker and the company.

I've hit this in a few other videos, and in the future, I'll go into a lot more detail.  But for now, I'm going to shift gears a little over the next couple of weeks and talk about some historical developments that have shaped the way we think about work.  Hopefully, if we understand what shaped that thinking, we can change things and reshape or reframe our thinking.

Subscribe and follow along.

Have a great day and I'll see you tomorrow.

90 - Productivity

How do you know if your team is as productive as possible?

I've seen some weird calculations for productivity in businesses.  Most of the time, it depends on who is doing the measuring.

Since we're talking about visual management systems and productivity as a measure for the team, we have to think clearly about what our team members need to know about productivity and delivery.

We have to know our team's output.  What is it that they produce and deliver to customers?  What are they supposed to accomplish every day?

Everyone assembles some type of product, even if it's an information product like a report to your boss.  In places where you only do that once a month, how do you know if you're being productive every day?

It comes down to daily targets set by the leaders.  These targets will break down the product or service to a daily chunk of work, then we'll measure our progress against that target.

In the easy case, my team needs to produce 24 scopes today, in one 8 hour shift.  Our target output is 24, but it'll help me keep pace if I break that down to 3 per hour.  I can check every hour now to see if we're on track to hit the target.  If the plan is 24 and the actual is 24, in its simplest form, that's 100% productivity.

Setting those targets isn't arbitrary though.  The target needs to be based on actual demand, and the team needs to be staffed to complete the work assigned.  If it takes the team longer than 20 minutes to complete that scope on average, they'll never be able to keep pace and hit the target.

I have all kinds of ways to help you determine your demand, your pace, and your targets that will give you truthful information and help you make better decisions.  I've done this with government offices, with manufacturers of everything from steel to apparel, with insurance providers, fast food retailers, warehouses, and hospitals.

Call me and let me help you build a more productive team.

Have a great day and I'll see you tomorrow.