After their recent recorded conversation, it was great to see John Shook, CEO of LEI, and Eric Ries, Author of The Lean Startup together on stage at Day 2 of The Lean Startup Conference in SF.
Some in the software-dominated Lean Startup movement need to be reminded that Lean concepts have their origins in the auto industry (although Eric does a great job of reminding everyone about this as often as possible, including in his book). I think it was really important for John to speak to the Lean Startup crowd… the important thing wasn't the NUMMI history, per se, but rather the core message of Lean Culture that can be so powerful in factories, hospitals, or startups.
Below are my raw notes and quotes from John's presentation (as part of the notes that I took over the two days).
Update: Video of the talk (my notes are below):
Eric Ries intro comments: I used to talk about manufacturing so much, developers got upset
- He was taught the waterfall development method – why were we copying an outdated model that wasn't being used in other industries anymore?
- Japanese management used to be a big fad, John Shook helped bring it here. Moved to Japan in the mid 70s and got hired by Toyota to learn first hand.
- John — Term “Lean production” is 25 years old — link to the original article can be found in my blog post
Machine That Changed the World book
- Toyota had radically better results and did things radically different
- Their method was described as “lean” by MIT researchers, including Jim Womack
- Lean is a “Learn by doing process” – John worked on the assembly line in Toyota City “Lean's incubator.” John wanted to work for the biggest, most Japanese company he could find
“I was lucky to be hired” because Japanese companies didn't hire foreigners. He only knew a little bit of Japanese. But Toyota hired him.
- He started working on creation of NUMMI in Fremont, CA
- How to transfer their production system overseas? They had never done it before. The method had been cooking for 3 decades, lots of influences from the US and elsewhere… developed in rural Japan
NUMMI – 50/50 Joint Venture between GM and Toyota
- Old failed GM plant reborn as NUMMI factory
- What we didn't know was that it was the certified worst factory in the world!!! early 1980s. GM quality was horrible. Worst plant in the GM system. World-class bad. Worst workforce in GM, said the UAW themselves. UAW leaders said “Even we can't talk to these people… they're crazy, intentionally sabotaging quality, wildcat strikes.”
Didn't just improve a bit… it went from the worst to the best
- Record for best GM quality score 1 year later with the SAME workforce
- NUMMI: A new kind of workplace — workers liked it (said the UAW!)
It was an experiment – can we really make this work in the US. Proved that we did
Changed the culture with the SAME workers
- It's a management system – need the social system and the technical system at the same time.
- Engage everyone in continuous Problem Finding and Experimenting
- Toyota turned the responsibility on its head – easy to say, but how do you do it?
Beautifully designed technical and social system.
Worker finds a problem, knows what to do – pull a rope (an andon cord) – line will stop if the problem can't be resolved within the 60-second job cycle.
- You're crazy to bring this to Fremont? You're going to give these workers the rights to stop the line if they want?
- Job is for EVERYBODY to identify and fix problems
- Make it easy to do every job the right way, easy to find problems, easy to do PDCA — and support people in improvement
- Wrong-site surgery (Mark's note: this happens ALL the time – even now, it's a culture problem)
Hiding problems is the most anti-Lean situation
- Need to find problems quickly so we can solve them – make everyone an expert problem finder
- No problems is a problem – you need to see them, find them, solve them
- NUMMI is now the Tesla plant
- The Ford Milpitas, CA plant from those days — it's now a mall
Creating sustainable organizations
It's a management system. It's an organizational AND a personal transformation
Be Lean from the start in a startup company
- Solving problems through continuous experimentation
- What is our purpose?
- How do we improve the work and develop the people
- Give everyone permission to fail and ability to succeed
Can't we still do these things in Startups, evefn though they are different and have more uncertainty
All workers need permission to fail and ability to succeed
Tweets and quotes from his talk
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Mark,
Thanks for the summary and how great to have Shook interact with the software folks.
I’ve been “crossing over” from the lean world to the software world, as well as into the startup world, quite a bit. I’m not sure why the wall seems so big. We didn’t consider it a “cross over” when I went from manufacturing to retail to healthcare to consumer products. What I see quite a bit is similar to what has happened in lean manufacturing and that we’ve been slowly extracting ourselves from, and that is getting stuck in a dogmatic application of tools as opposed to building a thinking culture. We are very slowly getting the manufacturing world and the transactional business process world out of that space. The product development lean world has a ways to go to understand the thinking behind the tools, and except for a few very good applications, the lean and agile software world still needs to see that the tools are not the answer to everything.
[…] (see my series of blog posts here). NUMMI was, of course, a joint venture between Toyota and GM (as John Shook talked about recently at the Lean Startup conference). NUMMI was shuttered a few years back when GM pulled out of the partnership, but the building was […]
Thanks for the treasure.NUMMI is a classic example for culture change,Wish to know the steps followed to transform NUMMI.If you have many material,Please share.Thanks in advance.
Here is an article written by Shook about NUMMI and the lessons learned: (link)
[…] “Lean Startups Should Be Lean Cultures From the Start” by Mark Graban “John Shook: Lean Production Meets Lean Startup” by Mark Graban Lean Startup from Toyota City to Fremont to You by Bronwen […]
[…] and management practices that apply in factories, healthcare, startups, etc. Sort of like what John Shook talked about last year. So, I hope to see you […]