Reflections From Lean Leaders Transcripts from Podcast Interviews with Authors and Thought Leaders

Mark Graban

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Introduction - Sample Edition ...... i

Podcast #1: Norman Bodek on Kaizen and Continuous Improvement ...... 1

Podcast #142: Eric Ries on Taiichi Ohno & The Lean Startup 16

Thanks for reading the sample! ...... 22 Updates of the book over time ...... 22 Introduction - Sample Edition

Thank you reading these LeanBlog Podcast transcripts. To listen to all podcasts and for more information about subscribing, please visit [www.LeanCast.org] (http://www.leancast.org). Please visit my websites:

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You can follow me on Twitter as @MarkGraban³. This was put together with a combination of computer transcript with a bit of review and editing by me, so there might be some typos or mistakes. If you find any typos or bugs, please email me at [email protected]⁴ and I’ll send you a link to download a free copy of my latest book, Measures of Success: React Less, Lead Better, Improve More⁵ via LeanPub.com. Thanks! Mark Graban

¹http://www.leanblog.org ²http://www.markgraban.com ³http://www.twitter.com/markgraban ⁴mailto:[email protected] ⁵measuresofsuccessbook.com Podcast #1: Norman Bodek on Kaizen and Continuous Improvement

July 16, 2006 Podcast Page Link⁶ - MP3 File⁷ Mark Graban: Welcome to the first ever Lean Blog podcast. This is Mark Graban, creator of the Lean Blog. My guest today is Norman Bodek, one of the leading voices in the Lean manufacturing world. I’m very happy to have him here with us. First, a little bit about this podcast. It’s my first attempt, you’ll notice I’m not a professional broadcaster. I’m a Lean consultant, I’ve worked with Lean as an engineer and consultant for about 12 years. I started what was then the Lean Manufacturing Blog, in early 2005 when I was working as an internal Lean change agent for a large manufacturing company. I continued the blog as I moved last August [2005] into a new role as a Lean health care consultant working in hospital settings. The website evolved into, what we call simply the “Lean Blog” because it’s about manufacturing, healthcare, and aspects of Lean that really do apply in any sort of industry. The blog has been really a great learning opportunity for me. I’m hoping that this podcast will expand my learning and I’m hoping

⁶http://www.leanblog.org/1 ⁷https://mgraban.hipcast.com/download/932c3142-5098-ecdc-3e16-4301d25d1e29.mp3 Podcast #1: Norman Bodek on Kaizen and Continuous Improvement 2 that others are going to join me in that learning journey. This is the first of what I hope will be a monthly series of podcasts. Each of them an interview with a leader or an innovator in the Lean world. Today, I start with Norman Bodek. He is the president of PCS Press, a publishing, training, and consulting company based in Vancouver, Washington. He discovered and published the works of the truly great Japanese manufacturing geniuses Dr. and Taiichi Ohno, the inventors of the . From his numerous trips to Japan, he introduced to the western world the Kaizen Blitz. Single-Minute Exchange of Dies, Total Productive Maintenance, hoshin kanri, poka-yoke, and other new manufacturing method- ology that have helped companies improve their quality and pro- ductivity around the world. Norman’s written countless books, including The Idea Generator: Quick and Easy Kaizen⁸ and his most recent book Kaikaku: The Power and Magic of Lean⁹. You can find more about Norman and his books at his website www.pcspress.com¹⁰. Norman, I want to thank you very much for being here on the first Lean Blog Podcast. Really is a pleasure to have you here. Norm Bodek: Mark, I want to thank you very much for do this with me. It’s going to be a lot of fun. We’ll talk a lot of management issues. Hopefully, this will stimulate a lot of people out there to focus more on continuous improvement. Why I think it’s the heart of the Toyota Production System. Mark: I was hoping we could start off first, we talk a little bit about the background of Quick and Easy Kaizen, first that’s the title of one of your books. Tell us how you discovered that approach, how that might be different than what other people think of with Kaizen or Kaizen events. ⁸https://amzn.to/2Rd6dLC ⁹https://amzn.to/2R8HGaF ¹⁰http://www.pcspress.com/ Podcast #1: Norman Bodek on Kaizen and Continuous Improvement 3

Norman: Yes, they are distinctly different. Seeing that, whoever the other person was change the name. Originally it was called, “Five day and one night”. I met Ohno’s two chief assistants warden account. They told me they were leaving Toyota and they want to come to America to teach a consultants. I said, “Fine, I’ll bring you over and I’ll run events for you.” And I did. I brought them over and they ran these events called, “Five days and one night.” Then Barnwell changed the name to “The Kaizen Blitz” and it’s not appropriate. Because Kaizen is small incremental improvements. That’s what Kaizen is. Kaizen is change, Kaizen is small continuous improvements. Kaizen Blitz is really Kaikaku, which is the name of my other book. Kaikaku means “Radical change”. That’s what a Kaizen Blitz is, it’s a radical change. What Kaizen is, as I said, it’s small incremental improvements getting everyone in the company involved. The suggestion system I credit it to Kodak back in 1898. The first suggestion was, “Clean the windows.” It’s a wonderful idea. The purpose of a suggestion system was to get ideas, to get all the employees involved, to empower people. To help them participate in a direct way in the organization. Back then in the late 1800’s and early 1900’s people were just doing very simple repetitive tasks and the supervisor would not let the worker do these things. Very often when you do stuff with a suggestion system, people come up with ideas for other people to do things and not them- selves. It went from a suggestion system to a cross-saving system where the average American company that had a system would get one idea every seven years. That’s a statistic that was given by the America suggestion system. Mark: That’s per employee? Podcast #1: Norman Bodek on Kaizen and Continuous Improvement 4

Norman: That’s per employee per year. One idea every seven years. Toyota, who re-looked at this. In studying America management, they re-looked at the America suggestion system and they said, “We want to get all of our employees involved.” We’re doing quality circles, which is putting people in teams, teams are coming up with ideas, but how do we get everybody to come up with ideas? Small, little ideas to make their work easier and more interesting. They adapted it first, the American system, and slowly changed it. The first year I think Toyota started on this, they got one idea per employee for the whole year. After about 10 years, they were up to 46 ideas per employee per year. One per month. One per month implemented idea from an employee. That repre- sented millions of ideas. In fact, I published a book once called 40 Million New Ideas in 20 Years at Toyota. 40 million ideas. Now, it’s astronomical when companies think of this. How can I manage those kinds of ideas? In fact, I gave a lecture out here to company in Oregon, and the manager had 900 people in the plant. I said in Japan, they get two ideas per month per employee. He said no, I have 900 people. I can’t manage 1,800 ideas, and he wouldn’t go forward, so soon. Because you don’t manage it. People manage it themselves. People come up with an idea, and they do it themselves. A lot of people do come up with ideas, and they implement it. But the beautiful part of this system is that it is a system. It’s a process to stimulate and encourage everybody to participate in change, to use their creativity ability. Most people have such boring dead end jobs in factories. Most people just hate to come to work. When I ask the question to audi- ences what day of the week you like, almost everybody says Friday, Saturday, and Sunday. It never really happens that somebody says Podcast #1: Norman Bodek on Kaizen and Continuous Improvement 5

I love Monday or Tuesday. They don’t like work, and yet most of your life is spent at work. The reason is because they don’t have a creative opportunity at work. This system, quick and easy kaizen, is brilliant, in that it gives everybody the opportunity to be creative. Just in the smallest little things. I gave a lecture on Tuesday with the Sandia labs in Albuquerque, New Mexico, and I kept misplacing my pointer. Then I said to the audience what can I do? Help me. What can I do. Of course, right away, somebody says put a string on it. Put a piece of Velcro on it or do something. There are some many clever ideas we can come up with to make our lives so much easier. This very clever system became adapted by almost every major Japanese corporation. The average in Japan is two ideas per month per employee, 24. I work with Gulfstream Corporation in Mexicali, Mexico. I went in there, I think, it was about April of this year. A year ago, when I first went there to give a training, their goal was to get one idea per employee per year. They have about 1,000 people. They want 1,000 ideas. Prior to that, they were getting about one every seven years, just like the American average. I ran a two day course with them, and now they’re up to 1,000 a month. They’re getting one idea per employee per month. I’ll give you one idea, just one idea. What they do at Gulfstream is they do the wire harnessing. That means they have people, predominantly women, that are wiring the inside of an airplane. It took these two women seven days to do their part of the wiring to do this one harness. Seven days to do it, and then they spend four hours to check it out. The way they check it out is they got to bend down under the panel. Visualize the panel as the size of an airplane wing. They have Podcast #1: Norman Bodek on Kaizen and Continuous Improvement 6 to bend down under the panel, and they pull out these plugs, about 50 plugs. They take a plug, and they connect it to the panel to check out that the wiring was correct. It took them four hours every seven days to do that. After that course, asking the people to make their work easier. This woman, one woman, came up with the idea instead of bending down, why can’t we take all the plugs and connect them to the top of the panel? They did. They put all the plugs to the top of the panel. Now they just pull them very easily from the top and make the correct connections. Instead of spending four hours, they do it in one hour. Two women save three hours a week times two that’s six hours. 40 airplanes in a year. You’re saving 240 hours from that one little idea. Now there are 40 panels in that plane. That means there are 80 other people. If you multiply 40 times 240 you get about 9,000 hours it would save. We encourage people to copy each other. Mark: Let me ask you then, you talk about there not be a big bureaucratic process involved in harnessing these ideas. I think of your suggestion system. Filling out a form and it goes through a committee. Of course there’s a lot of waiting time, waste and delays before somebody blesses the idea as being a good one. How was the process different with the wire harnesses? Norman: Very good, Mark. The difference is this. The reason the old suggestion system was bureaucratic is because they gave a 10 percent of the savings back to the worker. These are the accountants. They’re going to freak you out because before they’re going to give to 10 percent. The funny thing is the company is saving 90 percent and they’re Podcast #1: Norman Bodek on Kaizen and Continuous Improvement 7 worries about the ten percent. Funny thing, they make a mistake. In this system you don’t give ten percent for the ideas. Some companies do though. Some companies like Toyota, we’ll talk about that in a few minutes, Toyota does both. The average company in Japan, maybe give five dollars for an idea. A lot of companies don’t give anything. When I teach in America, I don’t encourage any company to give any money. I do encourage them to share, to share profits, maybe a bonus system. Maybe give lots of prizes at the end of the month. Toyota does thing very cleverly. If you’re not absent the whole year they put your name into a barrel and they give away like 15 cars at the end of the year. Things like that. You don’t do award people and it’s not bureaucratic. A person comes up with the idea and the system encourages that person to do the implementing of their own idea. Mark: As a manager, do you ask people to run experiments? If they have an idea, to say, “Go try it. See if it works.” Is that part of the process? Norman: I keep it pretty simple. You come up with an idea you can check with your supervisor. I tell them to check with the supervisor to get started. If I’m going to put a piece of Velcro on a little clicker, I’m going to have to ask my bosses permission. Part of the Toyota system is followed, just two pillars. One pillar is Lean, the elimination of waste. The second pillar is called, “Respect for the people.” Respect people, which means you trust people. You set up a system like this, you trust people. They’re going to do things right for the company. If they don’t, they’re going to learn. Just like everybody else learns. We keep it very simple. Look at Technicolor. I started to teach there, and in 2001 they got 250 ideas and 113 were implemented. From 1,800 people. Which is a typical American suggestion system. Podcast #1: Norman Bodek on Kaizen and Continuous Improvement 8

About one every seven years. The last 12 months they got 27,000 ideas and 17,000 were implemented. From the same population of about 17 to18 hundred people. Mark: Sure. Norman: They hired no additional person to administer those 27,000 ideas. Mark: You had somebody counting the ideas at some point. Norman: They count them, yeah. The way the system works is, you write your idea on a simple form and you implemented it. Then you submitted it to your supervisor. The supervisor should keep the statistics of his group or her group and then turn it into one central person. Who’s keep the statistics for the company. Then the ideas are posted up on a wall all around the factory, all around the offices so people could see their ideas. We also encourage people to copy from each other. Mark: How do you manage the balance between the ideas of standard work and Kaizen in that experimentation, if you have the people just trying things they may be deviating from that standard, how do you keep the system from degrading? Norman: That’s a very good question, Mark. A lot of people are worried about standards. The interesting thing about standardized work as opposed to the old standardized system in America, is standardized work encourages people to make changes. Standardized work is not the old standard that you cast into stone. Standardized work represents the best way of doing something, and if somebody does it better you change the standard. It’s the same thing here. Most of these little ideas have nothing to do with the standards. Most of these ideas don’t, some will. Most of them are just very simple ideas that people get to make their work easier. Podcast #1: Norman Bodek on Kaizen and Continuous Improvement 9

Mark: As a supervisor, or a lead in the environment, you’re keeping track of suggestions and if you see something that’s working, you’re encouraged… you’re asking, or telling others to adopt. “This was a good idea, you should be doing that also.” Norman: It very good what you are saying because the Toyota system, which I like very much, is the managers a taught not to tell but to ask. I owned a company called Productivity. I had about 127 people and I never asked. I never asked anybody, I was the boss. I must have been the smarted because I owned the company, that was my attitude. I never asked, I just told. Toyota is totally different, their managers are taught to ask. Some- one comes up with an idea. You look at the idea. You complement them, you never criticize the idea. That’s a very difficult thing to do for record managers, but you never criticize. Then you hang it up on a wall and you encourage everybody to read each others ideas, so you can copy them. The worker has to be smart. If they do something that effect the second shift, they should check with the second shift worker to see how it effects them. That’s why I like Toyota second pillar, it’s called, “Respect for people.” People mature, given the opportunity they’ll do a superior job. Mark: That very good background into some of the differences in the Toyota or the Kaizen approach compared to what we nor- mally see with suggestion systems. Lets focus on Toyota. You had mentioned there were some changes that Toyota’s making to there approach..Kaizen and suggestions. Norman: When Toyota came to America they were very careful. They didn’t want to impose the Japanese system that quickly. They were very careful. Mark: This is looking at NUMMI or Georgetown? Norman: It doesn’t matter. Wherever Toyota came they were very Podcast #1: Norman Bodek on Kaizen and Continuous Improvement 10 careful in setting up their system. Even their, “Just in time” system took a very long time. Very careful in coming over here. When they first came over, they pretty much had adapted the America suggestion system. Then they put a variation which is Japanese system. Now the system became an American at adaption. It was different than Japan, Mexico and Georgetown (TMMK), and up in Cam- bridge. Their system became a combination system. A worker could get quite a few thousand dollars at Toyota if their idea saved a lot of money. This was very rare in Japan, Toyota encouraged very small ideas. At first, I don’t think they gave any money. Then, a little money. Then they made a mistake. Somebody said, let’s give $20 a idea, they gave $20 an idea. A couple of people got very clever. At least one man was so clever that he got himself a swimming pool for his home. Mark: [laughs] Norman: On $20 an idea. Because If I shuffled a piece of paper from one side of the desk to the other side, and I said, “That’s an idea,” then that got $20. So one of the senior managers. I don’t know who it was. It might have been Mr. Cho, or whoever was in charge up here, said, “That’s crazy. We’re not going to do that anymore.” It’s the old saying, “You don’t throw the baby out with the bath water.” You don’t get rid of a good system because you made a mistake with the $20 an idea. I would have just done very simply, and said I’d only give $20 if it’s worth $20. It was so simple. If it’s worth 20, give 20. If it’s not worth 20, then just pat him on the back, thank him for the idea. Podcast #1: Norman Bodek on Kaizen and Continuous Improvement 11

And put the idea into a hat. At the end of the month, maybe you have a drawing and give away two tickets for a dinner somewhere. Mark: There’s a story for the people that might think that Toyota never makes mistakes. Norman: They made a big mistake with the suggestions system, because they stopped it. They went from 50,000 ideas, this was up in Cambridge, and also in Georgetown. They went from 50,000 ideas to 500. Mark: This was after taking away the $20 per suggestion? Norman: Yeah. They didn’t kill the system entirely. I have to call them. I haven’t spoken to them recently to see if they re-adapted, and they got any smarter. I don’t think they did, but maybe they did make some good changes. Even in Japan, they reevaluated this. It went from 46 ideas a year to 9 or 10 per year. They switched the system a little bit in Japan too. To give you an example, Subaru, though, a year ago, got 108 ideas per worker. Mark: What do you think, is that difference coming from differ- ences in management approaches? Is there more of an effort to track the ideas at Subaru. Because I’ve always wondered with Toyota. You see the numbers on suggestions, and I wondered how many of those little daily , little changes, are they stopping and taking time to formally document. I wonder if that reduced the numbers. Norman: Toyota documented every single one of them. That’s what I do when I teach. I mean, the 27,000 ideas of Technicolor are all documented, and they’re hung up on a wall. The ideas that are not implemented, you hang it up, because then people can help you implement it. What I really encourage those, I encourage the focus on the imple- mented idea, not on the suggestion. I like a system that is almost 100 percent implemented, forcing the worker. Podcast #1: Norman Bodek on Kaizen and Continuous Improvement 12

You come up with an idea, and you get it done. You either imple- ment it yourself, or you ask your supervisor to help you, or you ask a team member to help you. Some of the ideas might require engineering. They might require maintenance. You might have a Poka Yoke idea which is very good, but you don’t know how to cut wood, you get somebody to help you cut the wood. I don’t want you to leave your idea. I don’t want you to come up with your idea, for somebody else to do it for you. I want you to keep the ownership of that idea. Mark: The other thing I like about that approach is that it shifts the emphasis. So many times, people bring complaints to their supervisor. “Here’s what’s bothering me.” It sounds like this approach, you really try to encourage people. Instead of just complaining, come to me with a solution. Look to the problem. Norman: Of course. We have a very clever form, which is, “This is before improvement, and this is after improvement.” They have complaints, it’s not bad. You want some avenue for people to express their complaints. I like what you said, Mark, which is you turn it around, and you get everybody to focus on what we call “continuous improvement.” That’s what “kaizen” means. It’s continuous improvement. The role of the supervisor. They have to be very careful not to criticize. I was teaching one company. One of the first ideas that was submitted, this woman goes to her boss. She shows her the idea, because we’re telling everybody, “We want you to come up with at least two ideas per month”. Most companies now, I tell them I want to see one idea per week. I want you to come up with the 50 ideas. You can do it very easy. I mean, I have people that are coming up with an idea a day, like in Podcast #1: Norman Bodek on Kaizen and Continuous Improvement 13

Gulfstream. Oscar Ortiz, he comes up with at least four ideas every single day, implements an idea every single day. This one worker brings this idea to the supervisor. The supervisor looks at it, and says, “That’s not exactly what we mean,” so the worker walks out of the room. What do you think the worker says to their fellow worker? Mark: I’m sure they’re discouraged, and that might be the last thing they suggest. Norman: Absolutely. You’re right, Mark. [laughter] Norman: It’s what you said. I’ll never give them another idea. The funny thing is, this is so simple to do. I don’t know why. I’m working on this now. I’m working on a new book, trying to understand why we don’t adapt this, why don’t we do simple things like this. I mean, Technicolor claimed they saved $8 million last year, the third year running. In three years, they saved $24 million from these ideas from their employees. The average in Japan is $4,000 per employee per year. Arvin- Meritor, this is an automotive parts company in Michigan. They also claimed that they’re getting about $4,000 a year savings per employee. Why aren’t other companies doing it? We’re running to China to save money, and we can save a fortune by just asking our people to help. Mark: That’s all our time. Mark: Norman, thanks again for being here on the first ever Lean Blog podcast. Norman: Thank you, Mark, very much. Podcast #1: Norman Bodek on Kaizen and Continuous Improvement 14

Mark: That’s the first podcast. I’d really like to thank Norman for being here. We talk about suggestions, and, ironically enough, this podcast really was a suggestion from Norman. He approached me about the idea of doing an interview, and it turned into this podcast, which we plan on continuing as a monthly feature. More discussions with Norman, but also other leaders and innovators in the Lean world. Talking about his comments of people being in boring, dead-end jobs… As I’ve been working in health care, I’m even seeing cases of that in hospitals. For example, in a hospital laboratory, a woman approached me one day and started talking about how she felt like a “robot,” as she put it, because of advances in the laboratory equipment over time. Here was this scientist, and she felt like she was reduced to the role of material handler, of loading tubes into the instrument. She didn’t even look at the test result most of the time, unless there was something really out of the ordinary that required her review. I talked to her about how Lean, and particularly kaizen, was going to help make the most of her brains, and her training, and her experience as a med tech. That it was going to be part of her job, not just to load tubes into an instrument now, but to come up with ideas every day for making it a better workplace, and for, ultimately, providing better care to patients. At least in the health care environment, we’re lucky. It’s easy to rally everyone around the patient. That’s why people enter the field, and it’s certainly a very important reason to come up with kaizen in daily work. Whether you’re in a factory, or health care, or any sort of envi- ronment, if you’re working with Lean, as Norman talks about it, I would definitely encourage everyone to look at more than just reducing waste. Podcast #1: Norman Bodek on Kaizen and Continuous Improvement 15

Look at that second pillar, the respect for people, pillar of the Toyota production system, and think about how you can make sure that people are really contributing, and not just being robots. Podcast #142: Eric Ries on Taiichi Ohno & The Lean Startup

March 14, 2012 Podcast Page Link¹¹ - MP3 File¹² Here is a transcript of our podcast with Eric Ries, talking about the impact that Toyota legend Taiichi Ohno¹³ had on his work and the Lean Startup movement. This discussion took place just after the 100th anniversary of Mr. Ohno’s birth¹⁴. Read and listen to¹⁵ reflections from others, including Norman Bodek¹⁶ and Sami Bahri DDS¹⁷. Mark Graban: We have a great guest today, he is Eric Ries¹⁸, the author of the book The Lean Startup¹⁹. Today we are going to be talking about Eric’s reflections on the work of the great Taiichi Ohno. One of the fathers of the Toyota production system. Just two weeks back or so would have been the 100th anniversary of his birth. Eric is joining us to share how Mr.

¹¹http://www.leanblog.org/142 ¹²http://mgraban.hipcast.com/download/b1dfd846-1d70-7bcd-6aa4-b06297448977.mp3 ¹³http://en.wikipedia.org/wiki/Taiichi_Ohno ¹⁴http://www.leanblog.org/2012/02/today-would-have-been-taiichi-ohnos-100th- birthday/ ¹⁵http://www.leanblog.org/2012/02/today-would-have-been-taiichi-ohnos-100th- birthday/ ¹⁶http://leanblog.org/141 ¹⁷http://www.leanblog.org/2012/02/today-would-have-been-taiichi-ohnos-100th- birthday/#comment-28907 ¹⁸http://www.startuplessonslearned.com/ ¹⁹https://amzn.to/2BtlTAo Podcast #142: Eric Ries on Taiichi Ohno & The Lean Startup 17

Ohno’s work impacted him and helped in his development of the lean startup methodology. As always we want to thank you for listening. Thanks for joining us Eric. Eric Ries: Thanks for having me. Mark: As we’re just passed what would’ve been the one 100th birthday of Taiichi Ohno, one of the fathers of the Toyota produc- tion system. I wanted to get your thoughts because you cite Mr. Ohno a few times in your book and I’m curious how did you get introduced to his work and how did he influence you. Eric: Well it’s been incredibly influential. I think I would go so far as to say it has changed my life. It’s actually just a coincidence, it’s a funny thing how these things work. To just set the stage a little bit I had founded a company called IMVU in 2004 and I was really into a lot of the ideas that are called agile software development which have their origins in lean. But a lot of the works I had read about them, Toyota was not specifically mentioned, lean principles were not mentioned. So, I didn’t know the theory of a lean or anything like that. I knew nothing about manufacturing. I have actually to be totally honest never set foot in a manufacturing plant in my whole life. So, I had no idea at any of that would be relevant to me. But I had this intuition that we should be going a lot faster in a startup and doing practices that even in the agile world were considered a little bit extreme. We’ve had the chance to talk about them on other occasions, things like continuous deployment, really putting software in customer’s hands much faster than was previously considered possible. I had this problem which was, I had no way to explain to anybody why that was going to work. People would look at me like I was completely crazy. I could see that it was working because I was very stubborn and I had this intuition. I said, “We’re going to do it, no matter what.” It was working, we’re always hiring new employees, the company’s Podcast #142: Eric Ries on Taiichi Ohno & The Lean Startup 18 growing, we’re bringing on investors. And we had investors that when they were doing their due diligence for the company, pulled out because they didn’t like the answers I was giving them about how we built the technology. They would bring their experts in, experts trained in more tradi- tional software development methodology. They’d be like this kid is crazy, he doesn’t know what he’s talking about. This is not the way it’s done. So, it was a continuous point of stress for me and my co-founder, OK. And you got to remember at the time, I was by far the youngest person on the team and I was often younger than the employees I was hiring and training in them in this method. So, it’s not like it was this easy situation to be in but I really believed it was right. And so, I was reading everything I could get my hands on for ideas about, first of all, was I actually right or was it a fluke? And if that was right how could I possibly explain it? I had read some cases about Toyota, business school cases so I was a little bit familiar with that. There was this thing called Toyota Production System that’s all I knew and I figured I should be educated about it. So, I go on Amazon and I type in “Toyota Production System” and lo and behold this book by Taiichi Ohno comes up called Toyota Production System. I said,” Perfect,” it must be the definitive guide. Toyota Production System, I got this book and I’m holding in my hand right now. I found my copy. You know, you’ve read the book it is a very wise, very humane philosophical treatise on how to run a business. As a practical manual for setting up a factory or doing any other task it is not exactly your step by step guide. And so, I remember just having this feeling that I was reading something crazy. It is kind of like Zen mumbo jumbo about auto-nomination and automation with a human touch and all this stuff. But there is that one passage about five whys in there and just all the sudden for me Podcast #142: Eric Ries on Taiichi Ohno & The Lean Startup 19 for whatever reason that little section where he talks about trying to get to the root cause of problems by just asking why. And he has a few examples, things that I don’t even know what they are. A machine with a strainer it incorrectly attached. I have no idea what that looks like, never seen a machine strainer my whole life. But somehow his very humble, very analytical approach was like a lightning bolt to me. And I said, “Oh, I can do that.” That is going to solve a huge class of problems that I have in my life where I’m constantly fighting with people about how much prevention… When something goes wrong do we blame the person? Do we blame the computer? Do we fix just that problem? Do we try and solve that whole class of problems? That was super helpful. That was one of the very first times I’ve learned to see the work that I was doing in the management that I was doing as a system that needed engineering and debugging just like the software I used to writing. Mark: So the ideas of the five whys being so impactful and you expand on this in The Lean Startup and everything you’re teaching, did that become a helpful reference point to talk about Ohno and Toyota? I mean, how did people in software companies or startups react? “Oh, here goes Eric talking about this Toyota guy.” Eric: You’ve got it exactly right. I mean people were looking at me like I was completely nuts. To be totally fair it’s of course not just Ohno’s book but a lot of others that were very helpful. I didn’t really make a lot of progress, I got to mention about the five whys but that was as far as I got until I read Lean Thinking and that series of books. The Mission That Changed The World, the books that have been specifically written for American managers, breaking it down in a lot more detail and putting the pieces together not in the Zen style but in a much more western analytical style. But even then, a lot of people would come to me with a software problem and I would start talking about batch sizes and die stamping and stuff. Podcast #142: Eric Ries on Taiichi Ohno & The Lean Startup 20

But of course, you got to remember my ability to explain die stamping machine is limited, I’ve never seen one and I don’t really understand what it does. A funny thing that happened to me was after that we were able to get really clear by changing batch size, by doing five whys especially, and by adapting some of these practices. It was later that I came to really appreciate that I had started with Ohno’s book. It almost felt like, I went back and I read it again and again, I felt like I had his voice in my head in a lot of situations where my first instinct would be to blame somebody or to not go and investigate something for myself but just assume that somebody else had it figured out. The idea that your organization has an autonomic nervous system, that it needs to be able to do the right thing automatically without people having to expend heroic effort. Those kinds of ideas, that philosophical approach it was just there with me all the time. And so, when you reached out to do this and celebrate his 100th anniversary, I thought what an awesome opportunity to reflect on just the wisdom that he represented. Mark: Yeah, I know it is something I’ve learned a great deal from. Sami Bahri who a fantastic dentist in Jacksonville, Florida is a similar pioneer to the work you’ve done, Eric, because he wanted to apply this idea of Lean to his dental practice. He didn’t have a book to go read about Lean and dentistry. He went and he read the books by Ohno, and Shingo, and Womack, and others. He very had to kind of synthesize his own approach that would make sense. But it is really fascinating to see that Mr. Ohno’s work has touch people in different industries, including yourself. Eric: I’m just flipping through the book as you are talking too, because I was remembering his simple formula. Something like, present capacity equals work plus waste. And you’re like “well duh”, but no not “duh”. If you’ve never thought to think of the system in that specific way I don’t think there is anything intuitive about it. I don’t know anybody who would like, can frame that as Podcast #142: Eric Ries on Taiichi Ohno & The Lean Startup 21 a matter of intuition. But once you have that framing in your mind you cannot, it is a testament to what a good idea it is you cannot let it go. You can’t see any work… I went through a phase where my family was sick and tired of it because we couldn’t go to a restaurant without me being like, “Wait a minute, they should be using on the gravy line.” “Crazy, what are you doing?” Grocery store analysis and all this stuff but it changes your sense of what is intuitive and what actually makes sense. I am kind of looking forward to reading this again. I feel like I am going to go back and see what other wisdom I haven’t yet come to understand. Mark: Well, it is definitely fun to go back and revisit. I would love to help fix that problem that you have never visited a factory Eric. Maybe we can line something up, we can find a sponsor in your neighborhood or if you are back in Texas let’s go down to the Toyota San Antonio plant. Eric: I would love to do that sometime. Mark: Give you some context for what you’ve read and hopefully will be rereading. Eric: Yes. Would love to do that. Mark: Well, I want to thank you. Thanks a lot Eric for sharing some of your recollections and thoughts here as we celebrate what Mr. Ohno brought to the world and to what we would call the Lean or and now through your work and others the Lean startup methodology. Thanks for taking the time to talk about that today. Eric: No, I appreciate it. I feel honored to even be in the same kind of chain of thinking as them. Thank you for your leadership in this issue and thanks for your support. Mark: Thank you. Thanks for reading the sample!

I hope you enjoy this sample edition and that you’ll consider buying the whole book at https://leanpub.com/leanpodcast To listen to all podcasts and for more information about subscrib- ing, please visit [www.LeanCast.org] (http://www.leancast.org). Please visit my websites:

• LeanBlog.org²⁰ • MarkGraban.com²¹

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Updates of the book over time

As per the Leanpub.com approach, this book is a work in progress… always. It was released initially as an unfinished work, but is “complete” as of January 13, 2014. I might add more transcripts over time. As an early buyer, you’ll get occasional updates to the book as I:

• Edit the content • Add new transcripts

²⁰http://www.leanblog.org ²¹http://www.markgraban.com ²²http://www.twitter.com/markgraban Thanks for reading the sample! 23

• Add commentary and reflections to the start of each tran- script chapter

This was put together with a combination of computer transcript with a bit of review and editing by me, so there might be some typos or mistakes. If you find any typos or bugs, please email me at [email protected]²³ and I’ll send you a link to download a free copy of my latest book, Measures of Success: React Less, Lead Better, Improve More²⁴ via LeanPub.com You can listen to the audio of each episode and learn more about subscribing at www.LeanCast.org²⁵. Thanks! Mark Graban

²³mailto:[email protected] ²⁴measuresofsuccessbook.com ²⁵http:/www.LeanCast.org