Lean People

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16.660 / 16.853 / ESD.62J Introduction to Lean Six Sigma Methods

January (IAP) 2008
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People: The Heart of Lean
“There are two major distinctive features of these
[Toyota Production and Kanban] systems.
One of these is ‘just-in-time production’, an
especially important factor in an assembly
industry such as automotive manufacturing.…
Second…is the ‘respect-for-human’ system
where the workers are allowed to display in full
their capabilities through active participation in
running and improving their own workshops”
Ref::Y. Sugimori, K. Kisunoki, F. Cho, S. Uchikawa,”Toyota Production System and

Kanban Systems - Materialization of Just-In-Time and Respect-For-Human Systems”, People: The Heart of Lean V6.2 Slide 2
International Journal of Production Research, Vol. 15, No. 6 (1977), pp. 553-64 © 2008 Massachusetts Institute of Technology
“The soft stuff is the
hard stuff.”
Chris Cool - Northrop Grumman
People: The Heart of Lean V6.2 Slide 3

© 2008 Massachusetts Institute of Technology
Learning Objectives
At the end of this module, you should be able to:
• Explain why people are the key to
improving productivity
• Describe how to be an effective member

of a team
• Compare & contrast leadership vs.
management

Question
What are the most

important things that
contribute to your
job satisfaction?
Please contribute ideas,
then we will vote on them

Drivers of Employee
Satisfaction
2003 Employee Satisfaction Index
Key Driver Analysis
Pay •
• Job makes
good use of skills • Job security
• Encouraged to come up
with new and better ways • People I work with
cooperate to get the
• Satisfaction with recognition job done
High received for doing a good job
Performance • I have enough information
to do my job
Work Env.
• Conditions allow me to be productive
(ESI)
• Overall job done by supervisor
• Involvement in decisions
• My Company makes
• Opportunity to
changes to compete
improve my skills
0.75 0.65 0.55 0.45

High Correlation / Strength of Association Low
Courtesy of Boeing. Used with permission.
Source: Boeing Air Force Systems Employee Involvement Strategy 2003 © 2008 Massachusetts Institute of Technology
Productivity Virtuous Cycle
*Richard Kleine, John Deere, c 2000 ** Elton Mayo, c 1920
Southwest Performance vs.

All U.S. Domestic Airlines
Operating
OperatingProfit/Available
Profit/AvailableSeat
SeatMile
MileFor
ForU.S.
U.S.
Routes (1978-2005)
Routes (1978-2005)
Industry
IndustryAverage
Average Southwest
Southwest
22
Cents/ASM
11
Cents/ASM
00
80 0
82 2
84 4
86 6
88 8
90 0
92 2
94 4
96 6
98 8
00 0
02 2
04 4
19 98
19198
19198
19198
19198
19199
19199
19199
19199
19199
20200
20200
20200
1
-1-1
-2-2
Southwest
Southwest has has made
made aa profit
profit every
every
year
year since
since itit started
started operation!
operation!
Ref: Airline Monitor © 2008 Massachusetts Institute of Technology
Southwest Airlines… www.southwest.com
Courtesy of Southwest Airlines.

Used with permission.
• Has had only one fatality in 35 years of operation - an
overrun on a snowy runway at Midway on Dec 8, 2005
• Flies only one make of aircraft - Boeing 737

• Simplifies training, maintenance, logistics
• Has never had a layoff of employees to reduce costs,
including after 9/11
• Is the most highly unionized major U.S. airline

• Has a point-to-point, not hub-and-spoke, route structure
• Consistently offers some of the lowest fares available
• Is a favorite of both investors and employees
What makes Southwest so successful?

Organizational Competency
“In this book I argue that

Southwest’s most powerful
organizational competency…
is its ability to build and
sustain high performance
relationships … characterized
by shared goals, shared
knowledge, and mutual
respect. Although these
relationships appear simple,
appearances are deceptive.”
(Emphasis added)
Courtesy of McGraw-Hill. Used with permission.

Relational Coordination
• Shared Goals aligns employees to prioritize

organizational success over “just doing my job”
• SWA: Safety, Satisfied Customers, On-time Departure
• Shared Knowledge enables visibility of the overall
work process, and the linkages between different jobs
• SWA: Functional groups help each other; Pilots help
flight attendants, gate agents help baggage handlers,…
• Mutual Respect reduces barriers between employees
and employee groups
• SWA: No one employee group is more important than
another
Supported by effective communication

Ref: Gittell, The Southwest Airlines Way © 2008 Massachusetts Institute of Technology
Communication
Colleen Barrett, SWA President
www.southwest.com
Courtesy of Southwest Airlines. Used with permission.
From The Southwest Airlines Way

• “With frequent, timely communication,
Southwest employees could respond quickly to
changing circumstances in a coordinated way.”
• “…Southwest employees communicate about
the problem itself, rather than assigning blame
when difficulties occur.”
Open
Open and
and honest
honest communication
communication is is aa
hallmark
hallmark of
of lean
lean thinking
thinking organizations
organizations
Coordination Correlates with
Performance For Airlines
Coordination
Coordinationvs
vsPerformance
Performance--Airlines
Airlines
0.65
0.65
Coordination
RelationalCoordination
SWA
0.55
0.55
0.45
0.45 SWA
Relational
0.35
0.35
0.25
0.25
-1.5
-1.5 -1-1 -0.5
-0.5 00 0.5
0.5 11 1.5
1.5
Flight
FlightDeparture
DeparturePerformance
PerformanceIndex
Index
“The performance effects of relational coordination are

large and statistically significant. This means you can be
confident of achieving improved performance results if
you can increase relational coordination.”
Coordination Correlates with
Performance For Hospitals
Coordination
Coordinationvs.
vs.Performance
Performance--Hospitals
Hospitals
0.85
0.85
Coordination
RelationalCoordination
0.8
0.8
0.75
0.75
Relational
0.7
0.7
0.65
0.65
-0.4
-0.4 -0.2
-0.2 00 0.2
0.2 0.4
0.4
Patient
PatientCare
CarePerformance
PerformanceIndex
Index
“Relational coordination among care providers enables

shorter hospital stays, higher levels of patient-perceived
quality of care, and improved clinical outcomes.”
Relational Coordination
Applies to Other Work Settings
• Work setting characteristics where relational
coordination applies
• Task interdependence - handoffs may require
feedback and iterations
• Uncertainty - adjustment of plans and updating
• Time constraints - time buffers not feasible
• Example work settings where relational
coordination applies
• Product development
• Production
• Operations
• Can you think of others?
SWA Organizational Practices
Supporting Relational Coordination
Lead with Invest in
credibility and frontline Shared
SharedGoals
Goals Quality
Performance
caring leadership
Shared
SharedKnowledge
Knowledge Customer
Hire and train Use conflicts Mutual
MutualRespect
Respect complaints
for relational to build
competence relationships Lost baggage
Bridge the Create Late arrivals

work/family boundary
divide spanners www.southwest.com
Efficiency
Measure Keep jobs Communication Performance
performance flexible at the Communication Turnaround
broadly boundaries Frequent
Frequent Time
Make unions Build
Timely
Timely Staff Time Per
your relationships Problem
ProblemSolving
Solving Passenger
partners with suppliers
Practices
Courtesy of Southwest Airlines. Used with permission.
Outcomes
Relational
Coordination
Outcomes of Relational
Coordination
The SWA Study shows that increased

Relational Coordination leads to:
• Higher reliability
• Better on time performance
• Fewer lost bags
• Greater customer satisfaction
• Fewer complaints
• Shorter turn around time
• Greater aircraft and gate productivity
• Most passengers served per employee

The Power of Workforce
Productivity
Workforce Productivity benefits at SWA

• Revenue generated from satisfied customers
• Revenue generated from airplanes in the air and

not on the ground
• Reduced costs from low employee turnover
• Reduced costs from not having employees idle

• Happy, satisfied employees

How Does This Apply to You?
• Leadership plays a key role at all levels

• What are characteristics of leadership and
how they related to management?
• What are the roles of leadership and
management in a lean organization?
• Teamwork is essential
• What are Integrated Product/Process
Teams?
• What factors affect team performance?
Let us focus on these two topics

People are
the Heart of
Tasks
the
What people do Enterprise
Processes and Lean
How people do it
People
Organizational Structures
What enables people
Culture
Leadership and Management
Leadership Focus in Organizations Management Focus in Organizations

(Doing the Right Thing) (Doing Things Right)
Decision Organization
Vision
Making Structuring &
Values Determining
Tasks & Work
Groups
Organization Human
Goal Resource
Engagement and its Development &
Attainment
Participants Management
Change and Fiscal & Conflict

Risk Taking Empowerment Technological Management
(Shared Resource
Leadership) Management

Source: Stanke, A. MIT SM Thesis; adapted from Hickman, 1998 © 2008 Massachusetts Institute of Technology
Matrix Organizations
(From the 1960’s)
Programs
Functions
X Y Z
Work Unit or
Engineering Individual
Marketing Invented to
allow
Manufacturing response to
rapid
Supplier Mgmt
technology
Support changes in
HR
aerospace
Legal
…

Integrated Product/Process
Teams
Customers  Engineering Manufacturing Suppliers  Operators
Integrated Product Team
New Way
- Linkages occurred here
Before IPT’s - Regular IPT meetings IPT leaders
- Linkages occurred here must be good
- Defined members &
- Coordination meetings
leaders leaders and
- Traditional networks
- Every member keeps good
- Grapevine-type
functional leadership managers!
communication
informed
Aligning the Focus
Strategic Direction
Near Term Direction
Where good leaders

spend time
Work Group
Individual
Unaligned Goals/
Projects Sound Business Principles Planned
and Involved Employees Journey
Integrated Product/Process
Teams
Stage 1 Stage 2 Stage 3 Stage 4
Directing Coaching Supporting Delegating
g e men t
M a n a
e r m e n t
Empow
Team Formation Team Building Collaboration High Performance

Team Behaviors by Stage
Team Behaviors
Stage 4
Stage 3 High Performance
Stage 2
Collaboration • Mutual respect and
Stage 1
Team Building
equal participation
Formation
• Team members by all members

• Team members begin openly give and
• Team interested in
to express themselves
• Team members seek feedback
individual and team
skeptical of one
•
openly
Only ideas and
• Differences of development
opinion are valued
another
opinions of a few team • Team values
• Little or no members are known
and worked within
differences of
commitment or trust the team
• Conflict is evident but
• opinion,
• Getting to know one remains unsolved; Team members
trust one another
perspectives and
another complaining is the conflict
• Communication is norm • Conflict is resolved • Team has a high
guarded • Learn to ask for help within the group synergy level
• Hesitant from one another • Team has a sense • Team has a
participation by • Struggle to not blame of cohesiveness comfortable working
members one another for
mistakes
• Team members atmosphere
• Struggle to make
• Team members begin
attempt to achieve
harmony through
• Knows what needs
consensus taking on more to be done and able
decisions cooperation to do it
responsibility
EMPOWERMENT


Leadership Behaviors by
Stage
Leadership Behaviors
Stage 4
Stage 3 High Performance
Stage 2
Collaboration
Stage 1 Team Building
• Pull back from day • Provides

Formation • Model open and to day tasks resources for team
honest • Allow team to take coordination
between shifts,
• Help to build trust communication on more and more
support groups,
• Inspire, motivate, • Help team learn of the “old”
etc.
from mistakes and management role
encourage team •
concepts
not place blame • Act as a resource, Partner with team
• Encourage team to “technical expert • Allow more
• Model good directly on call” for the autonomy
listening communicate with team • Share in long-
• Provide other teams • Delegate decisions range/ strategic
information • Make sure training • Continue to planning
• Be patient takes place provide business • Rewards and
• Provide clear • Revisit team goals to information recognizes
direction
make sure they are • Coach/counsel exemplary
performance
meaningful teams
• Help team deal with
frustration
EMPOWERMENT
EMPOWERMENT


Personal Values Exercise
• Get the sheet from your packet; spend 5 min to:
• Grade your personal values

• A = most important
• B = important
• C = least Important
• Then rank values using the grade as a first sort
• Form 3-4 groups; Each group will arrange these
values in rank order; take no more than 10 min.
• Each group will give a 2 minute debrief
• Class discussion

Adapted from Elaine Seat, University of Tennessee, Knoxville © 2008 Massachusetts Institute of Technology
Collaboration in Teams
Benefits Challenges
• More ideas and new ideas • Different goals and values

• Multiple areas of expertise
• Shared workload • Not being skilled or
practiced in it
• Stronger problem solving
• Improves design work • Defensive about work (ego)
• Preconceived Notions
• Different work styles

• “lone wolf”
• “I’ll do it”
• “me, mine”
• Previous unsuccessful
collaboration
Photo by Hugh McManus
Source: J. Craig, MIT 16.621 Lecture Notes, Spring 2003 © 2008 Massachusetts Institute of Technology
Courtesy of Jennifer Craig. Used with permission.

Three Elements of Collaboration
• Task - What is being done together

• Conceptualizing, problem solving, Task
implementing
• Process - How the task will be
accomplished Process
• Division and scheduling work,
coordination, managing time and
meetings, draft and revisions
Affect
• Affect - Feelings about the work
based upon:
• Prior experiences, culture, biases
Affect and process
• Current experience
support task
Source: J. Craig, MIT 16.621 Lecture Notes, Spring 2003 People: The Heart of Lean V6.2 Slide 30
How to Meet the Challenges
of Collaboration
• Elaborate key ideas in writing and
verbally
• Consider alternate ideas/solutions
• Don’t jump to consensus prematurely
• Pay careful attention to process
• Voice disagreements constructively,
directly, and explicitly
• Give positive feedback directly and
explicitly
Source: J. Craig, MIT 16.621 Lecture Notes, Spring 2003 © 2008 Massachusetts Institute of Technology
People are the Heart of Lean
What is the most

important thing you
learned from this
module?
Write a short answer on
a 3 x 5 card

Reading List
Cutcher-Gershenfeld, J., et. al., Knowledge Driven Work, Oxford

University Press, New York, 1998
Fischer, R. and Urey, W., Getting to Yes: Negotiating Agreement
Without Giving In, 2nd Ed, Penguin Books, New York, 1991
Gittell, J.H., The Southwest Airlines Way, McGraw Hill, New York,
2003
McGregor, D., The Human Side of Enterprise, Updated with
commentary by Joel Cutcher-Gershenfeld, McGraw Hill, New
York 2006
Senge, P., The Fifth Discipline, Doubleday, New York, 1990
Whyte,D., The Heart Aroused – Poetry and the Preservation of
the Soul in Corporate America, Doubleday, 1994

Acknowledgements
• Ron Bengelink - ASU, Boeing (ret.)

• Jennifer Craig - MIT
• Greg Harris – The University of Alabama in
Huntsville
• Jody Hoffer Gittell - Brandis University
• Richard Lewis - Rolls Royce Indy (ret)
• Ted Mayeshiba - University of Southern California
• Earll Murman - MIT

• Ed Schaniel - Boeing, IDS
• Elaine Seat - University of Tennessee at Knoxville

Notes

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MIT OpenCourseWare

16.660 / 16.853 / ESD.62J Introduction to Lean Six Sigma Methods

Ref::Y. Sugimori, K. Kisunoki, F. Cho, S. Uchikawa,”Toyota Production System and

Chris Cool - Northrop Grumman

People: The Heart of Lean V6.2 Slide 3

At the end of this module, you should be able to:

• Explain why people are the key to

• Describe how to be an effective member

People: The Heart of Lean V6.2 Slide 4

What are the most

then we will vote on them

People: The Heart of Lean V6.2 Slide 5

0.75 0.65 0.55 0.45

*Richard Kleine, John Deere, c 2000 ** Elton Mayo, c 1920

People: The Heart of Lean V6.2 Slide 7

© 2008 Massachusetts Institute of Technology

Southwest Performance vs.

Ref: Airline Monitor © 2008 Massachusetts Institute of Technology

Southwest Airlines… www.southwest.com

Courtesy of Southwest Airlines.

• Has had only one fatality in 35 years of operation - an

overrun on a snowy runway at Midway on Dec 8, 2005

• Flies only one make of aircraft - Boeing 737

including after 9/11

• Is the most highly unionized major U.S. airline

What makes Southwest so successful?

People: The Heart of Lean V6.2 Slide 9

“In this book I argue that

Courtesy of McGraw-Hill. Used with permission.

• Shared Goals aligns employees to prioritize

Supported by effective communication

People: The Heart of Lean V6.2 Slide 11

Colleen Barrett, SWA President

Courtesy of Southwest Airlines. Used with permission.

From The Southwest Airlines Way

“The performance effects of relational coordination are

“Relational coordination among care providers enables

Bridge the Create Late arrivals

The SWA Study shows that increased

People: The Heart of Lean V6.2 Slide 17

Workforce Productivity benefits at SWA

• Revenue generated from airplanes in the air and

• Reduced costs from not having employees idle

People: The Heart of Lean V6.2 Slide 18

• Leadership plays a key role at all levels

how they related to management?

• What are the roles of leadership and

management in a lean organization?

• What factors affect team performance?

Let us focus on these two topics

Leadership Focus in Organizations Management Focus in Organizations

Change and Fiscal & Conflict

People: The Heart of Lean V6.2 Slide 21

(From the 1960’s)

People: The Heart of Lean V6.2 Slide 22

Integrated Product Team

© 2008 Massachusetts Institute of Technology

Aligning the Focus