| Volume 9 No. 2 February 2008 www.superfactory.com | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| From the Editor | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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For you LinkedIn junkies, we have created a Superfactory LinkedIn group This month's featured article is by our regular contributor and Shingo Prize winner, Bob Emiliani. In his usual meticulously-researched manner, he describes the importance and history of the oft-forgotten "respect for people" pillar of lean. Ignoring this pillar is the predominant reason why lean efforts fail. As always we appreciate your support for our mission to spread manufacturing excellence knowledge. Take a look at our sponsorship and advertising opportunities here. - Kevin Meyer |
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| Manufacturing Excellence News | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| In the Blog | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Featured Book | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
This is the first book to present Lean leadership in ways that are specific and actionable for executives to apply at work every day. It links Lean principles and tools directly to leadership beliefs, behaviors, and competencies in new and innovative ways that connect to workplace and marketplace realities. It goes far beyond the common understanding of leadership and the training methods used for leadership development. The workbook can be used individually or by a leadership team in self-paced group training. Senior managers will be inspired by the proven approaches to improving their understanding and practice of strategic leadership. Practical Lean Leadership has won critical acclaim from executives with years of experience practicing Lean management in the real world. |
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| Article | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Lean community leaders have recently made two huge changes in how they present Lean. The first change is Lean as a management system rather than “Lean manufacturing.” Second, they are finally taking note of the long-established “Respect for People” principle. Why now? In part because there have been so few successful Lean transformations over the last 20 years. Another reason is that most other aspects of the Lean management system have been studied in detail, so this is the next territory to explore. This batch-and-queue non-integrative approach has severely increased the lead-time needed to properly educate people about Lean management – particularly the “Respect for People” principle. The “Respect for People” principle is one of two pillars of The Toyota Way [1]; the other is “Continuous Improvement.” The “Respect for People” principle has existed for several decades within Toyota’s management system, but has been almost entirely ignored by outsiders. In addition, this principle extends back to the 1900s and was recognized as essential by the creators of the Scientific Management system [2] – of which Lean management is its direct descendent [3] in tandem with Ford’s flow production system. In the old days, the “Respect for People” principle was referred to more narrowly as “Cooperation,” principally between management and labor [4, 5]. As many people have found out first-hand, practicing only the “Continuous Improvement” principle (called “Betterment” in the old days [2, 5]) leads to many problems. Foremost among them is management’s desire to improve efficiency and productivity usually results in layoffs, which slows down or halts improvement efforts. Root cause analyses of the problems that arise when only the “Continuous Improvement” principle is practiced indicates a countermeasure that today we call the “Respect for People” principle [3]. This point is worth repeating: “Respect for People” (Cooperation) is the primary countermeasure for bungled continuous improvement (Betterment) efforts. That’s why it is a Toyota Way principle. Indeed, the failure of the Scientific Management system to firmly establish itself in industry 60-100 years ago was correctly attributed to management’s inability to establish long-term patterns of cooperative and respectful behavior with labor, in addition to other leadership shortcomings [6]. The same thing is happening today. Lean management is struggling to replace conventional management on a narrow basis, let alone across wide swaths of manufacturing and service industries. It should be no surprise that history is repeating itself. The “Respect for People” principle is deceptive in that it seems very easy to understand and apply, but it is not. Most mid- and senior-level managers think they know what “Respect for People” means, but it is clear from leadership behaviors, common business performance metrics, company policies, management’s decisions, and sometimes even corporate strategy, that they do not. Top managers typically possess superficial, casual definitions of “Respect for People” such as fairness, civility, or listening. And they think they do these things quite well. Further, they think understanding the meaning of “Respect for People” is trivial for well-educated persons in high positions. This is a severe misjudgment. Far from being trivial, it is of great importance to the long-term survival and prosperity of a business to understand what “Respect for People” really means. |
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| Featured Evolving Excellence Blog Post | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Excessive or Progressive CEO Pay? We've read a lot over the past few years about supposedly excessive CEO pay. Tens and even hundreds of millions of dollars paid to executives that sometimes preside over outright failure. Severance packages that would provide a comfortable retirement for hundreds of us common folk. Some of us have even pointed out how this situation is somewhat unique to the U.S., and can even violate a "respect for people" pillar of lean manufacturing. While some push for regulatory control, I'm more market-oriented... the shareholders get what they pay for and there truly is a market that creates value for good leadership. But I'll admit the reality is that while shareholders could truly mass to create change, they are usually too disengaged or naive to do so, therefore executives get away with being paid for incompetence. American Express is going to try something a bit different. They are oft-regarded as an exceptionally well-managed company, but even in that context the proposed comp package for CEO Ken Chenault looks a little monstrous.
Just for context, Amex stock is currently at around 45, although as we know options are really worth a price differential. But when we dive deeper into the details of the comp package, some interesting concepts come forth. Read entire post (you can also view and post comments) |
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The Superfactory 20 list of public lean manufacturing stocks 
performed better than the S&P 500 in January... barely. 2007 data showed the Superfactory 20 returned over 20% more than the S&P 500... this year isn't starting off so hot! Take a look at the 
Practical Lean Leadership
The Equally Important "Respect for People" Principle 
