Lean Implementation: Use the Language of Industry

“Until these guys actually did it hands‑on, it just didn't register with them.” – Scott Sedam

Scott Sedam is President of TrueNorth Development and Todd Hallett, AIA, President of TK Design & Associates, Inc. are my guest this week on the Business901 podcast. These guys are at the forefront of Lean in the Homebuilding sector. Even more amazing is these guys talk the language of industry. They understand Lean but apply Lean by teaching it through doing. Great lesson for all of us to reflect on.

I will take exception with one thing Scott said below. His overall message is spot on. I stop short about agreeing about the belts and the specialist and believe it refers more to Six Sigma than it does Lean. This is an excerpt from the podcast, so it was said in a slightly different context. During the interview, I did not want to stop the flow of the conversation, so I left it pass without challenging.

However, the reason I use in an excerpt is to serve another purpose. With the rapid initiation of certification and the adoption of coach’s (which will probably lead to certification), I see a similar path that may be developing for Lean soon. Thoughts about certification:

1. It makes it an easier job for HR by specifying “credentials.”
2. People that pay for training (Bronze, Silver, Gold) receive a ROI.
3. Lean coaches can also receive recognition and differentiation.
4. Organizations can promote and offer certification (I wonder who certified them).

I can argue probably both ways about certification. My point is more directed at the thinking that we will achieve better outcomes as a result of certification. For example, with all the efforts to create belts, has Six Sigma create the results we wanted?

Our business models are changing to a more iterative process and our organizational structure needs to adapt accordingly. Providing additional hierarchy is not the answer. Can we certify and still drive continuous improvement to the lowest level? Or through certification do we create the quality departments of the past? I don’t have an answer, or making judgment. I am just voicing a concern.

An excerpt from the podcast:

Joe: I think it's very interesting your approach at applying Lean, because it's not about, "Here are these Lean tools. We need to apply 5S. We need to have a Kaizen." You seem to take it into the specific homebuilding sector and apply Lean and apply it in their language.

Scott: This has been a pet peeve of mine. You get the Lean Sensei, and there're a lot of great ones out there, but they're incredibly expensive. They'll come in. It's kind of a badge of honor for these guys to tell one of their clients, "Well, if..."

I actually heard one of them say once to a president of a company, "If you expect results any sooner than a year, then you aren't serious." I'm going like, "Go try to sell that to a homebuilder, especially in the housing recession." The idea that we've got to put everybody through the training, three days of training, then we're going to have 20 green belts that take 15, 20 days of training, then we've got to have five black belts to take all the certification.

That's great that you can have a lot of it. But there's an interesting thing, a negative that can happen in a lot of these companies. Then the Lean work ‑it was very similar to the quality movement in the '70s, '80s, and '90s ‑‑ becomes the responsibility and the ownership is in all these specialists.

Where I saw a long time ago, and I go back before I got to Pulte Homes, I was at U.S. Steel way back in production, and then Motorola and where we did precursors to what it is we call Lean now. Then did the consulting work with a lot of great companies like Caterpillar and John Deere and Cummins Engine are examples.

At Pulte, applying this in homebuilding, what I saw was that there was actually as many negatives in terms of having a specialist focus on this within your company as there were positives. When you make it the responsibility of everyone as part of what they do, then its part of their job. It could be harder for them to focus and concentrate on all the parameters and negatives of that, but on the whole, we think you come out ahead.

You've got to be a pretty big organization in my mind to justify having a fulltime staff on this. As you look at most of the builders in America, after you get past the top 25 or so, it's rare that any of them has more than a couple hundred employees, and probably still the 80/20 rule, 80 percent of the homes are being built by 20 percent of the companies that will probably have...well, it'll actually be a little higher percentage than that.

The point is companies with 100, 115 people or less are probably building the percentage of homes in America still. It's different than being a Ford or Chrysler or somewhere like that.

Our idea is to get these people to understand how to do this themselves as part of their job and see it as, "This is a way to make my job easier and get what I want to get done," not as, "I've got to use this special tool here or there, and I've got to make sure I call it the right thing in order to get this done."

We're not averse at all to using things like 5S or a Gemba Walk or something like that, but we don't stress it at all. Even in our orientation sessions when we do our Leans, I used to try to teach the seven wastes, and I quit doing that, because I realized it was pretty well going in one ear and out the other.

Until these guys actually did it hands‑on, it just didn't register with them. But after they do a hands‑on then they get really interested in learning. We think the building industry is just getting to where there might be some appetite for the more formal official training in Lean, and we're ready to do that. But that's just coming along as it's coming out of the recession here.