Key Questions About Leading Transformation

Back in September of 2017, I was fortunate enough to be interviewed by Przemyslaw Ozga, the Editor in Chief of the Production Manager Magazine based in Poland. I wanted to post some of my interview content to those who are interested in learning more about my experiences in developing leaders around the world.

Hope you find my interview content useful.

?What was the most important lesson you learned from your teaching to others?

Jun: I learned many things, but the most important one was that we often tend to blame people for their cultural background and a lack of experience, ignoring the fact that there is the human potential in each human being to tap into. There was a theory that we use less than ten percent of our brains, right? Even if that is just a myth, the human potential is too often ignored in the reality of mass production and mass sales, where the work is divided, so workers do the same work for eight hours a day not even seeing their products. But if you somehow connected customers and employees, and created a system in which the employees could unleash their potential, you would see the success you could never think of before. We are all human, we have great human instinct and we should leverage that. Human nature is something that we develop throughout our lives, and sometimes it undergoes negative influences. We can become selfish and focus on our personal gains, but the human instinct is something that we are born with and it will never be taken away from us. For example, when you see a child drowning in a river, something tells you that you have to go and jump in, risk your life to save that child. This is a human instinct. – Animals do not have this. We do not know how we got this instinct and it is a great mystery. But as long as we have it inside ourselves, we are capable of sacrificing our own lives to go and rescue this child that we have never met before. Every individual has the potential to do something that is as great as this, although we are not aware of it. But when the moment is there, we just do it, not even having a second thought. Like when you drive, you do not think about how to drive, it becomes your muscle memory. Why can't work be like that too? This is the greatest thing I have learned through coaching others.

What is ‘the spirit of Kaizen’ in your opinion, Mr. Nakamuro? Is there a deep meaning that we, managers from Western cultures, cannot see?

Jun: This is a bit difficult to put into words since there surely is a difference between cultures. The Western culture has a very rational approach, you always reason things, meaning you hardly execute something until you fully understand its intention and logic. When you look at the Japanese culture, in turn, everything is based on human instinct. We have to be crystal clear that human instinct is not the same thing as human nature, and human instinct is also totally different from animal instinct. Human instinct works like science, it’s a logical way of getting to results. Theory and principles (I mean principles, not philosophy) that are based on human instinct, and founded on its scientific approach, bring you proper results. When people start to rationalize the meaning of Kaizen or the roots of TPS, they will never understand any of it. This is because as long as people have not really experienced Kaizen or TPS, they can never understand them. There is no way that they can reason it or rationalize it, as these systems are based on experience, and these people have no experience. Again, Kaizen and TPS are based on scientific and logical principles and they are not philosophy, as a philosophy is defined in Japanese as someone’s selfish explanation of how the world works around that particular person. Kaizen is more like evolution when you compare it to the biblical story about how God created humans and everything else. Evolution, as scientists talk about it, is about how monkeys developed into humans via natural selection (survival). Of course, in this context, we do not talk about monkeys becoming humans. Instead, we are talking about people developing to become better people. In traditional Japanese culture, our historic way of being is about evolving, so that once we are born into the society, we must develop ourselves to be better. And this is also the basis of Kaizen. (More about Kaizen: Lost in Translation)

In order to develop yourself, you always have to break your status quo. This means that you have to be dissatisfied with how things currently are, but in a very positive way. I always explain to my trainees that they have to develop this courage to break the status quo. For them to do that, we have to make sure they have a clear organizational structure and support. Therefore, if we need to engage frontline people, we first need to encourage their managers to be fearless of change, then make sure they can take responsibility for any shortcomings from the frontline. This is the ‘Spirit of Kaizen’ for trainees. From the other side, as a consultant, I always tell myself, “Today has been the worst day of my life.” this is just my way of framing my own mind. My Sensei in Japan taught me that no matter how great your results are, or how much the trainees give you praise, you should believe this has been the worst day of your life. This is how I break my personal status quo as a trainer so that I have the energy to do better tomorrow.

Breaking the status quo does not need to have anything to do with physical change, like buying machines, a new factory, or hiring more people. It is about how you change your behavior, which is the easiest thing to do, although at the same time it is the most difficult thing to do because of how others perceive it. Generally, based on my experience introducing numerous changes inside diverse organizations, I think that the meaning of ‘The Spirit of Kaizen’ has to change as you evolve as a trainee and a trainer. I have seen many people who were not satisfied with just proceeding in the continuous improvement direction because they did not know how to succeed. They did not evolve. They only focused on improvements they could understand by physical change, something that is external to their own mindset.

You sometimes criticize positive thinking because it has the potential to freeze us in the status quo. What is wrong with the status quo? Can you explain the role of “Hansei" in the way of Kaizen?

Jun: When you think there is nothing wrong with the status quo, it means you have not wholly understood the sense of urgency. Toyota had to understand it. They only had three years to catch up to American automotive manufacturers or else the Japanese auto industry would be lost. So when I am going to a company and they are not willing to change the status quo, I first work with the CEO or the president to communicate the sense of urgency. The best argument to communicate this to workers is via the financial sense of urgency: “If we continue this way, we will not be in business.” And you can actually end there, but then people may think that this is an organizational problem. Thus, you have to somehow map the organizational sense of urgency onto the personal sense of urgency, so that the problems the organization is facing become the workers’ personal business. This gives them a sense of urgency and motivates them to change. And once they become motivated, we have to make sure they are not just making any type of a change, but a change that will give them a better result.

As for positive thinking, the term is vague because people can differ on what is positive. But no matter what the understanding is, it should not be the first step. When I coach senior leaders on how to engage people, I always make sure that when they address the group, the first step they do is communicate the sense of urgency, which is the difference between the ideal state and the current state. If leaders can help the middle managers and frontline people first see the negative things, the shortcomings, and make a consensus on the ideal vision, then these shortcomings, instead of being only obstacles, become motivators to develop a sense of urgency. And only then, having seen the sense of urgency together, can you take up positive thinking. However, I do not like to call it positive thinking. I’d rather say "achievable goals." Instead of saying, “Hey, let us reduce the costs by fifty percent in three years,” which is probably not achievable in the short-term, we can say, “Hey, this month let us reduce the costs of the administration or the finance department by five percent.” The know-how that they get by doing this can then be replicated in other departments. By giving the workers achievable goals and providing them with help and assistance from a Lean and TPS perspective, we can ensure that they actually reach their goals. This is the positive thinking we should strive for. We can then say, “You have done a good job achieving five percent, but that is not good enough.” It is important to end every sentence with a challenge, not with a compliment because compliments alone do not really develop people. I think this is the essence of “Hansei” and the importance of maintaining a sense of challenge.

What does it mean to be a leader according to Mr. Nakamuro?

Jun: I would distinguish three levels of leadership: there is a manager, a leader, and a sponsor. A leader is more than just a regular manager, but not yet a sponsor. For example,  true leaders cannot ask subordinates to do something that they cannot do themselves. And when the subordinates cannot do the thing they are asked to do, the leader says, “Let us do it together.” This is the first behavior that I want to see when I coach leaders. Another thing is that when leaders want to empower frontline people, they have to make sure they are not delegating their own responsibilities by empowering others. On the contrary, these leaders have to show with their own actions how things should be done. A good leader can say, “If you are winning at the front end, do not let me know. But if there is a problem that you cannot solve, come and get me anytime.” Generally, becoming a true leader is a long way around of having to revisit everybody’s work and learn how it is being performed. On this basis, leaders can identify the current state and the ideal state. They can create a sense of urgency: the motivation to correct the issues. As these leaders develop, they have to go through behavioral change so that they can become sponsors. Sponsors do not have to lead anymore. They are to develop other leaders. A sponsor can say, “You make the decision on your own. But if you ever fail, I take full responsibility.”

What are the main differences between the traditional leadership style and the leadership style within the Cycle of Kaizen?

Jun: The traditional leadership style is very control-based, very top-down. Actually, every transformation has to start from the top, but the traditional leadership focuses too much on the top-down direction.

Is there too much focus on the ‘pyramid’ structure?

Jun: Definitely. In the Cycle of Kaizen, the sense of urgency has to come from the top, but only the sense of urgency. It does not tell people how to solve problems because it is the frontline people that have to figure it out. The leaders do not care about problems as long as they are solved in the end. Apart from providing a sense of urgency, leadership has to serve as an example to the workers. In the Cycle of Kaizen, the leaders have to demonstrate actions and attitudes from the top, in practice, because seeing is believing. Actually, I think this is the most successful way of removing the fear of change for the frontline people. Let them see their managers making a similar change so that they can think, “Well, my managers are doing this, so it is OK to make this change.” You can write a book on how to remove fear, or how you can overcome resistance, but it all comes down to one or two things that a CEO has to do. Balance is very important.

Many Lean transformations die after the first period of enthusiasm. How to keep transformation alive, make it an ongoing process, a never-ending story?

Jun: Yes… (laughter) It is possible that you focus too much on the tools or technology, whereas the leader’s mindset is not there. Actually, it is not even about the mindset itself. It is about the consensus on the sense of urgency. “Why are we here? What do we want to achieve? By when do we need to achieve it ?” And if we achieve that sense of urgency with the company’s mission and vision, how will this satisfy me as a person and as a member of society? This connection is not always there. It is particularly difficult in a multicultural workplace because you have to find something that is commonly important in all these cultures. Fortunately, I have been involved in many companies that have done this. Some of them, including those in the developing world, simply implement a recognition system. If somebody does a really good job, there are financial incentives, so they can support their families better. In this case, it is simply money. Because, although money is not everything, it is something that people can understand regardless of culture and religion. In your country, there also must be something at the core that both you and the immigrant workers, or managers, can understand. It is a good thing for us to work towards this core, the shared goal, and build a system for that. Sometimes, when a Lean transformation cannot be sustained, it is a leadership issue. Let us remember that we cannot fail frontline people. If they fail, we will lose customers. We cannot let them fail or make them feel disengaged or disappointed with any of these changes. But, leaders can fail, and sometimes they even need to fail to become better leaders. We have to understand this logic most of all.

How resources should we spend on the understanding of the current state before jumping into the PDCA cycle?

Jun: Understanding the current state and achieving a consensus of what is current by as many workers as possible is the best improvement that you can make in the first phase of transformation. When I go to a factory or an organization, I take the president or the CEO around the area in which the work is being performed because I know from my experience what results you can get just by looking at it. The amount of time depends on your experience. If you are a consultant experienced in a given industry, by looking at the general situation, the costing, the budget of an organization, you already know what the current state is. Many managers spend too much time in a conference room, trying to understand the current state, without even knowing what the second step is going to be. They think they get a consensus on the current state this way, but then, when you talk to the frontline people, they say, “No, this is not what is happening.” Another important thing is to keep the changes small when it comes to improvements on the frontline. That way, if a change happens not to work because you did not understand the current state correctly, all you have to do is say, “I am sorry, let us put everything to normal, let us correctly define the current state and then resume the cycle.”

How do you overcome cultural barriers and initiate the Kaizen culture in a multicultural environment, with many people from many nations working in one factory?

Jun: I have encountered situations like these and what I did was to first urge the foreign managers to get to know the local people better, outside of work. An example of this is to do simple socializing activities that require both of the cultural groups to step out of their comfort zones, to do something that is new for them like a team sport that none of them have played before. What is very important is that, no matter what integration strategy we choose, the managers should always have the same, or even slightly bigger challenges than the local workers. Why? Because if a few managers do not show up to work, the factory can still make money in their absence. But, if all the local people do not show up to work, the factory has to be shut down. Who needs to make the biggest effort then? The managers just have to do it, for their self-improvement and for their own financial and career-centered benefit. The question is, are the managers ready to step out of their comfort zone if they expect other people to get out of theirs? Generally, these questions are very easy to ask, but people do not think this way. These are valid questions, but there is globalization to consider. In Japan, we have many frontline workers from the Philippines and from South-East Asia, and we often implement a recognition and incentive system for them. This is another strategy for something that can be done quickly. You create an incentive system based on local cultural values. This is another easy method to overcome cultural barriers.

A number of companies use financial gratification as a motivating factor to make technical or organizational improvements. Employees know they will get money if they make any improvement in Gemba, in their workplace. Is this the right way?

Jun: Let us remember that we cannot fail front-line people. If they fail, we will lose customers. We cannot let them fail or make them feel disengaged or disappointed with any of these changes. But, leaders can fail, and sometimes they even need to fail to become better leaders. If the managers don’t show up in the morning the work can still get done. It isn’t enough for leaders to see the value in the work, the people who ultimately create that value need to see it most of all. Even if that value for them is simply, “This job allows me to support my family,” this can be enough. That is ultimately why we go to work, isn’t it? But some people don’t even have enough to support their families, which represents a huge failure in leadership. Conversely, some people in high paying fields have many options when it comes to supporting themselves and their families. For these people, financial incentives might not be as important as a feeling of greater purpose within society, or simply appreciation and recognition from their peers. It ultimately depends on the individuals as much as the culture. A culture is after all made up of the individuals within it. This is all the more reason for leaders to be truly present at the gemba. This means getting to know people. If you don’t know someone, you cannot lead and motivate them.

It is important to introduce changes in a proportional way. As my Organization Transformation Program diagram shows, while transforming your organization, you have to look at three factors. The first is technology. You need technology to augment the creativity of people and expedite their decision-making processes. The second is the management process. These two are physical changes. Third, you have the mindset. These three factors should be improved in a simultaneous way: a little bit of the mindset, a little bit of the technology, and a little bit of the management process must be addressed in every step you take forward. This is how you end up getting results like the best-in-class companies around the world.

About the Author:

Jun Nakamuro is the foremost expert in organizational design and re-design through applied knowledge. His top-level ability is exemplified in their leadership, quality work, and exceptional results. Jun Nakamuro is a master of leading business transformation who brings valuable knowledge and experience from many industries. He recognizes the power of engaging people to achieve organizational transformation and performance. Jun will realize your best return without additional investment by designing innovative management systems for your businesses supported by stronger leadership and modern technology.

Since 2007, Jun has undergone extensive training in Japan and received official certification from Ohno’s most successful protégé, Hitoshi Yamada (Canon, Sony, NEC, Toyota, and others), following the TPS guidelines officially approved by Taiichi Ohno in 1990. Hitoshi Yamada has recognized Jun’s achievement and endorsed him as a successor to Ohno’s TPS legacy outside of Japan. 

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Organization Transformation Program diagram:

More information about Jun Nakamuro's organizational transformaion model