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Introduction

I have spent my 45-year career primarily in two fields: war and manufacturing. These endeavors are not so different as might be imagined. I have learned much about people and the way work is done, not only in two decades at Boeing and another decade as a management consultant, but also as part of an Army that was facing issues of education, motivation, and the successful or unsuccessful waging of war. My journey has taken me all over the world, and I believe that journey has formally concluded at the intersection of people, lean principles, and the Toyota Production System. Along the way, I have gained the understanding that striving for perfection is a way of life, one that applies equally to not only a lean, world-class production system, or to business in general, but also to every human endeavor, from war to the delivery of health care.

My experience was won the hard way. After receiving my ROTC commission at Gonzaga University in Spokane, WA, in 1963, I served two tours in South Vietnam as an infantry advisor and adjutant general, five years in Europe as an Army major in the Human Resource Development Division of U.S. Army Europe, and in a number of stateside assignments, helping West Point graduates and three-star generals administer what would soon become an all-volunteer army. My education included the U.S. Army Infantry School, the Army’s Adjutant General Career Course, and the Army Command and General Staff College. One of my most challenging assignments was writing and organizing implementation of the Race Relations Education Program for the Armed Forces in Europe during the late 1970s. The Army also sent me to graduate school, and Boeing later put me through the University of Washington’s manufacturing course and an MBA program.

When I arrived at The Boeing Company in 1978, it slowly became evident that many of the same concepts I had dealt with in the Army applied in the corporate realm. I joined the company’s headquarters staff, then located in Seattle, WA, at a time when the aerospace industry was on an upward cycle, and Boeing was just beginning an odyssey to change the company culture and to embrace what was then designated as quality improvement.

Boeing began this quality journey facing the usual obstacles and some more unusual ones. The most unusual obstacle was that business was great! We were the number one commercial airplane manufacturer in the world, with a comfortable lead in market share. The air travel market was booming, and orders were pouring in, with no end in sight. We were expanding and looking into the new airplane program that would eventually become the 777 jetliner. Business was booming, the market was strong, the future looked bright. It was the best of times.

Why, then, worry about quality improvement? Because we knew that the hardest way to learn the value of success is by failing, and the toughest way to learn to appreciate being a winner is to become a loser. The Vietnam War had taught Americans some new lessons in that regard.

Times had not always been so good at Boeing, either. In the recession years of the early 1970s, the company went more than a year without receiving a single order. Employment in the Seattle area had been cut in half, and layoffs affected nearly 40,000 employees. Nobody wanted to return to such times. Boeing leaders came to recognize that success today guarantees absolutely nothing tomorrow. Like so many other companies, we were witnessing the decline of American manufacturers in other industries. We knew we did not want to suffer that same fate. We knew we needed to improve, and we knew we had many opportunities to improve. We were also well aware that in the aerospace business, things move very slowly. Changing a company can sometimes seem like trying to steer a glacier. Needed changes cannot wait until the need has become desperate, because by then it’s much too late.

So Boeing began the slow, frustrating, and sometimes painful process of change, ultimately revolutionizing the way it designed and built airplanes and how it did business. I witnessed 21 years of this change, often leading, sometimes following the lead of several emerging Boeing leaders. Those leaders were also adherents of past noted leaders and teachers like Henry Ford and Taiichi Ohno, and they were progressive in their views about how Boeing could be improved. It was quite an education, and I was lucky to be part of it. Since that time, Boeing has become the world’s largest civil aircraft company in terms of orders as a measure of market share, overtaking Airbus for the first time in 2000. The 737, introduced in 1967, has become the best-selling commercial jet aircraft in aviation history. During my tenure with Boeing, I witnessed the company’s ability to achieve this success and, even more important, its ability to adapt to competition and change, take shape.

Back in the late 1970s and 1980s, as I studied Juran, Deming, and the Japanese and began introducing their teachings at Boeing, my thinking and philosophy crystallized. I used my “lessons learned” from the Vietnam War to not only improve my understanding of the challenges of dramatic change management (which is really what lean production is all about), but also to better understand how to put the strategy and tactics in place to help business leaders make lean operations work and move toward a world-class production system. It is tough duty, and not easy, and as Deming said, “Not for the timid and faint-hearted.”

Not for the faint-hearted

The idea that implementing a world-class production system takes guts and the fortitude of a pioneer is not new. Henry Ford’s 1926 book, Today and Tomorrow, was once largely forgotten, but his ideas have never stopped having an impact, and the book is now back in print. Even Taiichi Ohno, father of the Toyota Production System and a thinker whom we will follow throughout this book, freely acknowledged that his close reading of Ford was a key stimulus for his own work. My highlights from Today and Tomorrow include the following excerpts:

There are always two kinds of people in the world – those who pioneer and those who plod. The plodders always attack the pioneers. They say that the pioneers have gobbled up all the opportunity, when, as a plain matter of fact, the plodders would have nowhere to plod had not the pioneers first cleared the way. Think about your work in the world. Did you make your place, or did someone make it for you? Did you start the work you are in, or did someone else? Have you ever found or made an opportunity for yourself, or are you the beneficiary of opportunity that others have found or made?

It is not easy to get away from tradition. That is why all our new operations are always directed by men who have had no previous knowledge of the subject and therefore have not had a chance to get on really familiar terms with the impossible. We call in technical experts to aid whenever their aid seems necessary, but no operation is ever directed by a technician, for always he knows far too many things that can’t be done. Our invariable reply to ‘It can’t be done’ is ‘Go do it.’

Many small improvements

Implementing a lean, world-class production system takes pioneering courage, but it can indeed be done. And just as pioneers explore new territory one step at a time, an organization’s lean, world-class production system can be built by one small improvement at a time. Big home runs are not required. A good portion of star baseball players’ hits are infield hits, and as Carolyn Corvi, vice president and general manager of airplane programs for Boeing’s Commercial Airplanes Group, has said, “It’s all about bunting and base hits. I have been on this journey since 1996, and you can’t hit a home run every time. Bunt, then get to first base. It builds on itself.”

Similarly, most of us have heard Lao-tzu’s old saw, “A journey of a thousand miles begins with a single step.” What too many executives forget is that the entire journey is made up of single steps. I have made dozens of visits to Japan, as both a participant and a leader of study missions designed to give first-hand experience with the strategies and practices of world-class Japanese manufacturing companies. These learn/do excursions, which often put me in grease up to my elbows on the factory floor, have given me the understanding that perfection is achieved by many small improvements made continuously. The simple truth is that focusing on the long term drives us to focus on the present, rather than the past or the future. And the present is where we need to be to replace mental models about how the relationships between people, materials, and machines affect how work gets done.

The individual has always been at the center of U.S. society, but at Boeing we learned that people in a team are the power and the enablers to create a world-class production system. The core of this vision is the fundamental belief in people and people-building. People must change the paradigms. When changes come from the work itself, and are instigated by the people who do that work, organizations change naturally. Structures change from hierarchical to flat. As a result, people working in the factory or office evolve, through the empowerment of the world-class production system, into high-performance teams. Costs drop and profits multiply, so long as the target of the people involved is the identification and elimination of waste.

The capacity to adapt to change is a fundamental, if seldom recognized, ingredient in Toyota’s success, as it must be in other companies wishing to achieve world-class performance. The “All American Kentuckians” at Toyota’s Georgetown, KY, car factory are contributors to Toyota’s record sales, revenues, and operating income in its 2007 fiscal year; its 15.4 percent North American market share; and its $16 billion in cash and cash equivalents. These people form a team of great diversity from varied educational backgrounds, and they will tell you:

•We have been given the authority to stop the line. “We don’t pass on defects.”

•Our system requires an incredible amount of detailed planning, discipline, hard work, and painstaking attention to detail.

•We work like dancers in a choreographed production: retrieving parts, installing them, checking the quality, and doing it all in immaculate surroundings.

•Our great strength is in our ability to learn. We are problem-conscious and customer-oriented, and this preparedness is the source of our company’s dynamic capability.

•We can develop a car in 18 months or less, and we don’t make the same mistake twice.

It’s worth noting that as American-owned car companies close North American factories and lay off many more thousands of employees each year, Toyota has never closed a North American factory and, indeed, has opened several new ones in the last few years. As pointed out by the author of a January 2007 article in Fast Company magazine, “Toyota doesn’t have corporate convulsions, and it never has. It restructures a little bit during every work shift.”¹ This gradual evolution is the beauty of striving for perfection in small but continuous improvements.

The importance of leadership

I strongly believe, however, that it is unjust to give people the expectation of “empowerment” in a system replete with waste and under the thumb of an autocratic management. Most waste does not result from a lack of ability or commitment on the part of employees or management. Often, these people are simply part of a structure and a way of operating that produces waste. But people striving to build world-class products have a right to demand an environment that allows them to work in a kaizen-based system, one that gives them the authority to identify and eliminate waste and continuously strive for perfection.

Only the leaders of the organization can create such an environment. Henry Ford had a few things to say about leaders, whom he clearly believed ought to be pioneers rather than plodders. He said:

A business ought not to drift. It ought to march ahead under leadership. It seems hard for some minds to grasp this. The easy course is to follow the crowd, to accept conditions as they are, and, if one makes a good haul, to take it and plume oneself on being smart. But that is not the way of service. It is not the way of sound business. It is not even the way to make money. Of course, a man may, following this old line, fall into a bit of luck and make a million or two, just as a gambler sometimes wins heavily. In real business, there is no gambling. Real business creates its own customers.

A business should pay everybody connected with it, and for every element used in it. It should pay for managerial brains, productive ability, [and] contributive labour, but it should also pay the public whose patronage supports it. A business that does not make a profit for the buyer of a commodity, as well as for the seller, is not a good business. If a man is no better off for buying than he would be if he had kept his money in his pocket, there is something wrong. Buyer and seller must both be wealthier in some way, as a result of a transaction, else the balance is broken. Pile up breaks long enough, and you upset the world. We have yet to learn the antisocial nature of every business transaction that is not just and profitable all around.

These words of Ford and others have continued to resonate in my mind as I have worked with many leaders at Boeing and other companies from a variety of industries — including service industries and the public sector, as well as manufacturing — who have come to my consulting firm for help in implementing a lean, world-class production system. Since my retirement from Boeing in 1999, I have worked as a consultant to organizations in the U.S., Belgium, Italy, and Spain. It has become quite clear to me that employee involvement starts at the top, with management. I will discuss this topic more in Chapter 5, but as both my Army and corporate experiences have demonstrated, leadership and management behavior are key. You cannot implement lasting and continuous productivity improvement from the ground up.

To create a lean, world-class production system, whether in a manufacturing company or a service or public-sector organization, managers must learn to embrace a long-term view, with the consciousness that what we do today is part of a continually improving process. In the chapters that follow, I will share some of the lessons I have learned in 30 years on the continuing journey to world-class performance. That journey is never finished, but I hope this book gets readers started in the right direction or helps them take a few more steps along the way.