Podcast #96 – Interview with Pascal Dennis on His Lean Business Novel ‘The Remedy’

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Transcript:

Announcing (1s):
Welcome to the Lean Blog podcast. Visit our website www.leanblog.org. Now, here's your host, Mark Graban.

Mark Graban (12s):
Hi, this is Mark Graban. This is episode number 96 of the podcast for August, 2010. My guest today is Pascal Dennis of the firm Lean Pathways, Inc. Pascal is a professional engineer, author, and advisor to North American firms making the Lean Leap. Pascal developed his skills on the Toyota shop floor in North America, in Japan, and by working with major international companies, and he's 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. And today we're talking about his new book, which is a sequel to Andy and me.

Mark Graban (55s):
The book is called The Remedy. So as always, I wanna thank you for taking the time to listen to the Lean Blog podcast. Well, Pascal, it's great to have you finally as a guest here on the podcast. Thanks for joining us.

Pascal Dennis (1m 8s):
It's my pleasure, Mark. Thanks for the invite.

Mark Graban (1m 10s):
Sure. So wanna 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 Dennis (1m 25s):
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 CTO, 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.

Pascal Dennis (2m 6s):
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, and most original thinkers in her view, to take on a bigger challenge. She asks Tom if he would become the chusa 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 desperately needs to succeed because they don't not only have to, you know, pay off their government loans and get outta bankruptcy and solve all their other problems, but they've gotta make a splash in the marketplace to regain the trust of, of their customers.

Pascal Dennis (3m 3s):
All the people that you know are wondering what's happening with Taylor Motors, are my warranty's gonna be honored? You know, is it gonna disappear entirely? Tremendous uncertainty. So they have to make a splash with the new environmental car. That's the background.

Mark Graban (3m 23s):
And it, it's a book that's clearly about, you know, transformation challenges and culture and management styles. One of the things I, I appreciated was hey, pointed out right away, I mean, it's, 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 you could talk about that as a, a general theme and philosophy with lean and, and how that fits in, you know, maybe with a company that is going through some real difficult business challenges.

Pascal Dennis (3m 53s):
Well, in order to do extraordinary things, you have to involve all your people, and that's blindingly obvious and usually ignored. You know, it's, it's a very strange thing in my view. We wanna motivate our people by laying off a whole bunch of them and shutting down sites and offshoring work. So if we accept that, then we've gotta make that promise upfront, and we've gotta keep the promise. And then if you've got good values, if you have a, a strong sense of who you are as a company and, and as individuals, you have a chance to motivate everybody and focus them on a great endeavor, something remarkable, and you have a chance to break through, you have a chance to be in the top 1% of companies, but that's only possible if you've got the trust and the regard and the faith of all your people.

Pascal Dennis (4m 57s):
I mean, it's, it's transparent to me for some reason. You know, it's hard, it's hard for some, some people to accept, you know, they think, well, you gotta just cut jobs and cut factories and, you know, bleed the company down. And that's somehow tough management. And I just think it's dumb personally,

Mark Graban (5m 19s):
A lot of people in the lean community have been talking about this for a very long time. This idea that, that you say is blindingly obvious is, is there, there's gotta be a mental model or something that's a, a sticking point from getting people to see that that's a necessary part of a lean transformation, that commitment and that trust or what, what would you say gets in the way in the real world?

Pascal Dennis (5m 39s):
I think as you say, mark, dysfunctional mental models get in the way and you know, I've, you and I have talked about them at length leaders, for example, not accepting that their role is to, to develop capability in their people, in their machinery, in their processes, in their supply chains and many other dysfunctional mental models. And, and they're in described in detail in the book, getting the right things done. But I think one thing that has struck me increasingly in the past few years is a root cause of this foolish and incessant downsizing and bleeding down of the company's assets.

Pascal Dennis (6m 24s):
A root cause of it is that we are outsourcing not just production, but also thinking we are outsourcing our thinking and we're doing so to so-called pundits that we see on TV or you know, consultants that are, that you have to offshore everything and they show us complex algorithms, which seem to make sense. And rather than saying, wait a minute, that doesn't make any sense at all, we accept the conventional wisdom and we outsource our thinking. So everybody learning like follows the so-called leaders. And then, you know, a decade later, two decades, decades later, we don't know how to make things anymore.

Pascal Dennis (7m 8s):
You know, we lose core skills like machining, like found like, you know, core design and interesting assembly and reassembly and, and such high level of skills. You know, we're outsourcing thinking

Mark Graban (7m 25s):
And, and I, I guess on the theme of maybe better thinking or, 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, you know, the, it seems maybe the challenge for Taylor Motors is not just a narrow lean production challenge or you know, about implementing lean tools that maybe that's not enough in a lot of real world cases. So I wonder if you could talk about that theme without giving away, I guess the end of the story. If you can touch on why that's an important theme in the book.

Pascal Dennis (8m 4s):
The, one of the villains in the book is big company disease. And 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. So big company disease causes a thick and anesthetizing fog to envelop the, the company you can't see upstream or downstream, you can't see your biggest problems and lateral connection, which is how value flows is lost.

Pascal Dennis (8m 48s):
And again, this isn't through ill will or anything, but people wanting to do a good job will optimize what they can see because the old adage out of sight is outta mind. If I can't see upstream or downstream, I'm gonna try to make my little corner better. But, you know, that generates the problems. You're, you're talking about silo efficiency, you know, unit efficiency does not equal overall efficiency. So the challenge is how do we cut across complex organizations with multiple sites and multiple divisions and multiple silos and multiple countries and continents and create a line of sight between the customer and what they want and what we do, you know, and connect everything and then you can pull and flow and start to harvest all the opportunities that lean makes available.

Mark Graban (9m 45s):
Now, I think it's one of the points that people miss, even if you go back to the machine that changed the world, that a lot of times people say, you know, even the subtitle of the book, the Story of Lean Production and they think, you know, 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. What was, I mean, can you share a little bit of your experience at, at Toyota maybe 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 Dennis (10m 25s):
That's a, that's a great question Mark. So just to underline what you're saying, the lean business system comprises three systems, the design, make and sell subsystems, but most of the attention, as you say, has been on the middle one on the make system, you know, the so-called Toyota production system. But the design and the sell systems are at least as important and, and some people say more important. So here's what I saw working at Toyota of the outside the factory connections.

Pascal Dennis (11m 5s):
We would regularly connect with our chief engineer or Shah for the models we were making, the Corolla and the solar, for example. And the shoe says job was to wrap his arms around the entire Corolla or solar 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. And, you know, he had a small team of people, but on a regular cadence, they would visit us, you know, pre, during and post launches, whether they were major model launches or model refreshes.

Pascal Dennis (11m 50s):
And he would connect with us on our top, top 10 quality problems, our top 10 ergonomic problems, our top 10 assembly problems, and they'd also go to our sister companies new me for example, or Toyota Turkey or other companies around the world that were making the Corolla, for instance. And thereby they would identify hotspots upstream and downstream of the, in the valley stream and be able to develop great insight. For example, I've no doubt the sh I would say, look, the way we have designed the body here is generating all of ergonomic problems downstream in manufacturing.

Pascal Dennis (12m 35s):
Moreover, it's generating these machine problems way over there in machine design. So the SH was able to zoom out and see the entire value stream design, make, sell, and make connections other people couldn't. And 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. So literally we got better every day. It's continuous improvement and that wouldn't have been possible without that shuah function.

Pascal Dennis (13m 16s):
That person who wraps their arms around the entire platform, including design, make, and sell, that's probably the most obvious one. There were a number of others, but the whole point was clearly to generate a holistic understanding and connection the customer.

Mark Graban (13m 34s):
And it might be fair to say that's a part of the big picture system and the overall business system that many organizations didn't learn from if, if they were just doing production in lean production without looking at the lean business system. Is that fair to say?

Pascal Dennis (13m 51s):
Yeah, I, I think so. I, I think, you know, with the best of intentions, a lot of companies have suboptimized, but it's not, you know, 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 there's a key point in manufacturing waste is usually visible scrap waste, for example, the auto business means a big pile of scraped out car bodies and you know, wise companies put them in a prominent place. So you walk by them every day and say, holy cow, did we make those?

Pascal Dennis (14m 31s):
Gee, we should we do something about that by contrasting, you know, business processes, scheduling, planning and scheduling, say a bad schedule looks the same as a good schedule. There's no way of recognizing that defect waste. Similarly, a forecast, a bad forecast and a good forecast look the same, you know, so 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 cell and upstream into the make phases as well. Yeah.

Mark Graban (15m 9s):
Now, one thing you touched on early in the book is, you know, some of the, the resistance you start looking at applying lean outside of the factory floor, there's all sorts of either, you know, cultural challenges or, or people being afraid of turn being turned into robots. What, 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, you know, sales and marketing of a manufacturing company, or if they're hearing that in, you know, healthcare or some other service setting that's, that's clearly not a factory floor?

Pascal Dennis (15m 44s):
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 and once they learn the fundamentals and get past some of those obstacles, why 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 straight jackets, but my job as a designer or as an engineer or as a salesperson will be devalued if there's a standard.

Pascal Dennis (16m 24s):
So a couple of points there. We have to apply lean fundamentals with finesse and intelligence when we get into knowledge and recognize that there is a high element of art history in jobs. Like, well doing sales or surgery or teaching or interviewing somebody. So there is an element of artistry. That's not to say we can't apply standards. We can, and we're 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 gotta be there in order for us to do an effective surgery.

Pascal Dennis (17m 8s):
And 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 step three and four and you know that that's, that's what you want. You don't want them robotically to follow this sequence. Similarly, you don't expect a teacher or professor to robotically follow an agenda. If there's a great learning opportunity, they can implement a teach back or a group activity or case study or tell a story. And that's what makes for a great surgeon or a great interviewer or a great teacher. You know, that's, I mean, that's another, that's, that's a core obstacle.

Pascal Dennis (17m 49s):
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. Right? You know, 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 gotta get a little better and you know, we've got probably 20 years of experience, but that may or may not be true in your marketing shop or in your design shop or in your, you know, sales or customer service area. So you've gotta germinate the soil so that kaizen can take root.

Pascal Dennis (18m 33s):
But as I say, the people are very good and so they usually pick it up pretty, pretty quick. But again, finesse is the

Mark Graban (18m 39s):
Key. Yeah, I like the way you put that leaving, you know, having the finesse to help explain the people, the idea of flexibility and what you described clearly does not sound robotic, that having a standard plan doesn't mean, you know, zero deviation from that regardless of, of what's happening around you. And maybe, you know, a final question just on, on that thought, you know, what was your experience, you know, even in a production setting, I, I think one challenge is that a lot of people hear about lean manufacturing. They've, they've never been in a factory and so it's kind of hard to translate, you know, and they think, well, you know, oh, in a factory, yeah, people are robots, but I mean, it seems in a good lean factory that's not the case.

Mark Graban (19m 25s):
Would you agree?

Pascal Dennis (19m 26s):
Yeah, you know, you're, you're absolutely right. A good lean factory or a, a lean surgery or a lean law office or a lean design shop is a place where you riff, you know, I'm a musician, so the standards for me, the sheep music or the scales are just a foundation for, for creativity, you know, and without the sheet music and without practicing the scales, you can't really do anything creative. All you create is noise. So the best factories that I've had the privilege of working at are like orchestras, you know, like an auto plant welding, you know, or stamping welding paint, plastics assembly are like, you know, the woodwinds, the violins, the, the timon, et cetera, et cetera.

Pascal Dennis (20m 16s):
And they're working together with a rhythm called tact time. And they're always getting better cuz tact time and all the other lean concepts make problems visible. So they're riffing all the time. And it's not an all robotic, in fact, it's the opposite of robotic. And it's, for me, it's, you know, one of the high points in my career is being part of companies that are able to do that, you know? Yeah.

Mark Graban (20m 42s):
Well you mentioned Tim, I used to play in orchestras, I'm a percussionist and you, there's, there's classical music where the, 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, you know, 10 times by 10 different symphonies, you're gonna hear different tempos, you're gonna hear different interpretations of that music. But then if you look at, at say, jazz, I mean that's, that still has structure. You know, people who don't know jazz might think, oh, they're just, you know, they're being completely free form and, and completely making it up.

Mark Graban (21m 25s):
When, when most jazz compositions have a structure that you improvise within. So maybe, I dunno if I'm butchering the analogy you were beginning, but different settings have a different amount of improvisation built in to the structure and what, and, and the expectations that, that people working in that system might, might have.

Pascal Dennis (21m 45s):
Yeah, e exactly right. And the amount of improvisation, of the amount of kaizen, if you will, on a given day, probably depends on the nature of the industry. I'm off the top of my head, if the situations are life and death, you, you probably wanna stick pretty close to the fundamentals saying a surgery, you better make sure, you know, 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 the surgery, once you've completed the work, you have a debrief, you identify opportunities. It's not to say that you're not gonna implement them, but in the heat of the moment, you probably will, will be less likely to, to completely riff, you know?

Pascal Dennis (22m 29s):
And the point is that standards do not constrain creativity. They, they allow creativity both in the work and supporting the work. Another metaphor I use is that just imagine the Rolling Stones, you know, they, you know, they're 149 years old now and they're on tour again. So how do they do what they do? Can I suggest that they are surrounded, protected, reported 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 cars and keeping track of Keith, you know, and etc.

Pascal Dennis (23m 23s):
Now. So they're nestled and protected bystanders. Now even within the performance, they have all the stuff we talked with the Sheik music and the scales and et cetera. Now they may alter their performance, you know, a given song will probably be done different in Rio de Janeiro than in Minneapolis. You know, that's, that's entirely right. Different atmosphere, different air, different audience. You're likely to, to, to react and, and riff or causing, but, but standards still are the foundation of what the Rolling Stones or, you know, the Chicago Symphony does, or a great factory or a great design shop. It's all the same.

Mark Graban (24m 5s):
Well, there's a lot of, you know, great points on, you know, the subtlety and, and maybe as you call it, the finesse of the lean approach and the lean philosophy and how to help, you know, transform an organization. A lot of that can be found in your, your earlier books, Andy and Me, Getting the Right Things Done and more so now in the new book, The Remedy. So wanna thank you for joining us and, and maybe as some closing thoughts, Pascal, if you could remind people of the, the full title of the book, different ways that they can purchase the book and find you online.

Pascal Dennis (24m 41s):
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. And I guess the easiest way to get it is online@amazon.com or barnesandnoble.com or booksamillion.com or any other onsite stores. You can also get it at your local bookstore and had a lot of fun writing the book. Hopefully it'll be helpful to people and I'm very much obliged to to you for, for the invite

Mark Graban (25m 26s):
As always. Well, sure. Happy to have you. And if people want to find you online, what your, your general website.

Pascal Dennis (25m 34s):
Well, thanks for reminding me. And as a matter of fact, we have a new website, which I'm very proud of, www.leanpathwaysinc.com. That's www.leanpathwaysinc.com. And 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. And do feel free to partake and for listeners, good luck with all your activities and just keep going and getting a little better every day.

Mark Graban (26m 10s):
Well, thanks for those thoughts and, and sharing your time with us. Pascal Dennis, our guest today, sorry it's been so long. Hopefully whether there, we'll have you back on the podcast again. There's an awful lot we could talk about.

Pascal Dennis (26m 21s):
That'd be great, Mark. Thank you so much. Thank

Mark Graban (26m 23s):
You.

Announcing (26m 26s):
Thanks for listening. This has been the Lean Blog Podcast. For lean news and commentary updated daily, visit www.leanblog.org. If you have any questions or comments about this podcast, email Mark at leanpodcast@gmail.com.

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