Love & Lean

George Saiz

President & CEOAssociation for Manufacturing Excellence

Early Years• First Job – General Helper @ $2.00/hr. • Early management thoughts

– “Create an environment where they don’t want to miss what’s going on”

• Education at night (BSBA, MBA)• General Helper to General Management

– (9 promotions in 17 years)

$2.25/hr.!

Introduction to Lean• 1992:

• Lot size of 1…Bottlenecks (Herbie)

• Lego Simulation

Love & Lean - Overview

• Journey towards developing a People-Centric Culture

• Connecting the heart of engaged employees with the tools of Lean

• Results you can see• Summarize what has been learned

Purpose

To be a TEAMDedicated

Innovative Solutions

Improve Customer Outcomes

June 2013

1st AME CEO Summit on People-Centric Leadership

A culture where every day everyone goes home fulfilled by pursuing excellence and where everybody flourishes.

People-Centric Leadership3 key takeaways + 1:

1. Very intentional efforts towards employees2. “Entrusted”3. PCL looked different at each company

Overriding thought: we have their hands, but we could have had their minds & their hearts if we had just known how to ask

Self Examination

1. Great programs for employees – episodic in nature– Quarterly All Employee Meetings– Picnic, Halloween Party, Christmas Party, Chili

Cook-off, Ice Cream Truck, Hot Dogs– Recognition – Company Bucks, Living Our Mission– Hands-on Product Training

Self Examination2. Leadership training consisted of educating

managers to go out and do something to our employees

– 6 one-day trainings / year on leadership3. We never asked our employees what they

wanted!

The Trail after their Minds & Hearts

Leadership Training - February 2014

What will people-centric look like here?• 42 leaders gathered – top management to

production leads• 3 components of the day

– Colonel Arthur Athens: “What’s love got to do with it?”

– Dissect his message and explore the behaviors of people-centric leaders

– Go to the Gemba…ask the employees what should PCL look like here?

Synthesized the day’s data…• Communication• Care• Alignment• Development

Goal Statement established:

“Engaged when we are here…fulfilled when we go home

New Name“People-Centric Culture”

• Why Culture:– Leadership is really a relationship – Goal is to educate both sides of the equation– Strove to make it daily…not episodic– Wanted it to be employee driven

Communication Skills TrainingSeven Interlaced Modules

How one leader reacted…

CARE

ALIGNMENT LINE OF SIGHT MANAGEMENT - PDCA CYCLE

Line of Sight Evolution

Teams and Framework

Company Culture, Strategic Framework, Teams and Functional Performance

Plans Introduced

Tracked, Functional Area Plans Driven by

Routine Follow Up

Focused on Results (Company,

Operational, Individual)

AME Hitting the Target!!!

Independent Units Focused, Clear Business Direction

Behaviors Identified and Organization Energized

Smart and Sharp, Lean and Mean

Vision and MissionDriven

Development, Benchmarking & Wellness

Pillar

• Development• Benchmarking the Best• Wellness

Program

• Mentoring & Coaching

• Autoliv, Danaher, AME

• Lincoln Industries Model

Pillar

• Development

• Benchmarking the Best

• Wellness

Minds & Hearts…to Hands• Equip all employees with a

standardized problem solving tool – A3

• How?– Trained all employees in

the A3 process– Hands on workshop

with real problem tackled– 3 year incentive plan

launched

A3 Incentive Plan & Evolution

• Payout if overall company goal achieved and individual goal achieved

• Year 1: One A3/employee/quarter– “On anything”

• Year 2: Two A3’s/employee/quarter– Department identified focus area of improvement

• Year 3: Three A3’s/employee/quarter– Introduced Team credit

Added in “2 Second Lean”

• Department read “2 Second Lean” as a team• All team members – 15 minutes daily at

beginning of shift• On my walks I reviewed their A3 submissions• Motivated me to start daily “2 Second Lean”

One of my “2 Second Lean” Improvements

2 Second Lean – 09/15/14

BEFORE AFTER

Business cards in folder Cards stored electronically through App

A3 ResultsA3’s become the standard problem

solving tool

Everyone is thinking “root cause” and asking…”what problem are we trying to

solve?”

Over 1200 A3’s completed in Year 3!

Shining Example• Over that time period, reduced COGS by $1.8M

annually on a single product through incremental improvements

Minds…Hearts…Hands

Another Example of Results – Autoliv

• 100,000 Kaizens in one year with 1100 employees– ~91 completed Kaizens per employee!

• In 2012, largest plant had 5X Productivity of 1995 with 3X product complexity

Copyright © 2016 Gallup, Inc. All rights reserved.28

HERE’S HOW Engagement Links to Business Outcomes and why it Matters

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

-37%

-25%

-65%

-28%

-48%-41% -41%

10%

21% 22%

Business units in the top quartile of engagement have 21% higher

productivity than their bottom quartile counterparts and 48% less safety

incidents.

Turnover

Absen-teeism

High-Turnover

Orgs.

Low-Turnover

Orgs. ShrinkageSafety

Incidents

Patient Safety

IncidentsQuality

(Defects)

Customer Metrics

Produc-tivity

Profit-ability

Meta Analysis Outcomes: Top vs. bottom quartile work units

Firms of Endearment (FoE)Investor Returns Over Time

Summary

• People-Centric Leadership – where everybody everyday flourishes

• Leaders are “entrusted” with these lives• People-Centric Leadership will look different in

each company• Minds…Hearts…Hands

Summary (cont’d)

• Current State of Leadership / Training:– Episodic engagement– Only educating half of the relationship– Never asked our employees what they wanted

• Shared the 6 Pillar approach:– Communication, Care, Alignment, Mentoring &

Coaching, Benchmarking the Best and Wellness

Summary (cont’d)

• Equipping, Incentivizing, Turning Loose!

• A3 Progression 1,200 completed in one year!

• Business Results that differentiate you from the

competition!

Wrap Up• Enterprise Excellence + People-Centric

Leadership / Culture can transform your company and the lives of your employees

• The transformation of your company cannot happen without the transformation of your employees!

One Last Quote

“Employees are not our company’s greatest asset…they are our company!”

Bob Pritzker The Marmon Group / Colson Associates

Thank You!Your opinion is important to us!

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Session No: ThP/42Love & LeanGeorge Saiz

AMEgsaiz@ame.org