You Get What You Reward, Boeing’s Rewarding Safety and Quality Performance

We’ve all heard the phrase “what gets measured gets done” but I also believe “what gets rewarded gets done even quicker.”

Understanding how employee rewards and recognition impacts productivity, performance, and employee engagement has been the subject of many studies and experiments, ergo, the salient connection between human behavior and appreciation needs no introduction. We are wired to crave connection, support, and acceptance from those around us, due to which the need for effective employee recognition has been diligently emphasized by thought leadership.

Behavior reinforced is behavior repeated. Behavior reward is repeated. This simple yet profound concept is at the root of more poor productivity, broken relationships, negative personnel issues and high costs of doing business than any other management principle.

Boeing has been in the news recently for a number of troubling safety and quality issues. Among the safety and quality issues of recent years have been two fatal crashes of the 737 Max jet due to a design flaw in the plane, numerous halts in deliveries due to quality control issues and, most recently, a door plug that blew off of a new 737 Max operated by Alaska Airlines in January of this year, leaving a gaping hole in the side of the plane.

The National Transportation Safety Board has determined that aircraft left a Boeing factory without the four bolts need to keep the door plug in place. It has yet to assess blame for the accident, but CEO Dave Calhoun has accepted responsibility for the incident.

The theme is a corporate culture that was once reflective of an engineering and product quality driven leadership to that of a financial and investment community culture of driving up share price and investor returns regardless of process control, pandemic or building supply network challenges.

In a Bloomberg, The Big Take in Business column titled: Boeing’s Legacy Vanished Into Thin Air. Saving It Will Take Years. (Paid subscription), the following was noted:

“Together, these point to a common problem: the company’s once-vaunted system for building its prized 737s has been badly damaged by worker turnover, supplier distress and the shortcomings lingering from the breakneck production last decade before the Max tragedies and the Covid freeze.”

This Bloomberg editorial further observes:

“At the same time that Boeing was reworking its supplier network, executives put greater focus on propping up the share price with the help of dividends and buybacks. Since 2011, the year the 737 Max was officially announced, Boeing has handed some $68 billion to shareholders in the form of dividends and stock buybacks, according to data compiled by Bloomberg, though it suspended the measures as its financial crisis deepened. Airbus, by comparison, has been much more conservative with its balance sheet, giving it greater resources to respond to the pandemic.”

After being rocked by years of quality and safety issues, Boeing is changing the bonus formula it uses to pay more than 100,000 nonunion employees. Instead of basing most of white-collar employees’ bonuses on financial results, bonuses will now be based mostly on safety and quality metrics.

The company has faced harsh criticism for a series of quality and safety issues in recent years, with many of those critics saying the company has shifted its focus in the last few decades to financial results at the cost of safety and quality in its aircraft. But those safety and quality problems have resulted in five years of operating losses topping $31.5 billion.

“It’s very, very important to drive the outcomes that we’re all committed to, and that’s to deliver a safe and quality product to our customer,” said Chief Operating Officer Stephanie Pope on Thursday in comments to employees announcing the new bonus formulas.

The troubled aircraft maker said 60% of the annual incentive score used to determine bonuses for employees of its commercial airplane unit will now be based on safety and quality metrics. It previously had 75% of that score based on financial results, with the other 25% based on operational metrics that included data beyond safety and quality readings.

Boeing said all employees will be required to complete training courses on product safety and quality management as a pre-condition to receiving any annual incentives.

A core principle of TPS is a system and process that depicts audio and visual systems that indicate a production process has been stopped because of a worker observing and flagging a quality control issue whenever they occur. To quote a Toyota descriptor: “Operators are equipped with the means of stopping production flow whenever they note anything suspicious. Jidoka prevents waste that would result from producing a series of defective items.”

The notion of Genchi Genbutsu (Go and see for yourself) compels production managers to dispatch themselves to where the problem was flagged and to produce timely resolution. It implies not penalizing the worker for calling attention to the problem, or risking a production shortfall, but rather triggering a collective effort toward resolving the problem as quickly as possible. That includes whatever engineering and technical resources that may be required.

The ongoing crisis has Boeing’s most senior management now compelling production workers to flag known production and quality problems. With the systemic changes to reward safety and quality it’s corporate culture can focus on producing each aircraft with the utmost quality and efficiency, and reward production and supply chain workers for their ingenuity and follow through. Such a culture rewards operational workers for significant quality and operational milestone achievements.

From my experience, this will take time and extraordinary efforts. The question remains, what is the willingness of Boeing’s senior leadership? It would be tragic if the commercial aircraft industry faces a singular dominant global provider. Industries require vibrant competitors, especially those with upwards of ten years in order backlogs for new aircraft.

Insights from GE CEO Larry Culp’s Annual Report

Larry Culp, CEO of GE, their first outside CEO in 125 years has been leading their transformation using a Lean mindset. Many Lean practitioners and business leaders have been following GE’s performance. Recently Larry released the annual report and I really appreciate the lessons I found within. You can read the full report here.

1.     Grounded in purpose, values, and responsibilities.

GE’s purpose of building a better world beholden to shareholders, customers, and society.

This document always has been about more than our financial performance, though. It’s told the continuous story of GE’s culture and how our values are embedded in the purpose of building a better world. We remain acutely aware of and humbled by our responsibility to shareholders, customers, and society. And we recognize that our team still, and always, strives for results.

2.     Tackle challenges head on with clear goals.

Companies are in business to make a profit, so this is not a surprise but goal two is really about how they expect to accomplish goal one. Lean will ensure their efforts are both sustainable and culture changing.

We embraced reality head on, taking disciplined and deliberate steps to tackle our challenges while investing to protect what made GE special. We set two clear goals: One, improve our financial position to deal with our debt load. Two, improve our operations to strengthen our businesses. Lean, with its relentless focus on the customer and pursuit of continuous improvement, makes our efforts sustainable and is leading to lasting culture change.

3.     Embracing a Lean philosophy rooted in kaizen.

We’ve been taught there is always an opportunity for improvement and embracing the spirit kaizen will propel your business forward.

Belief in a better way has propelled this company forward since our earliest days. Today, in an ever-challenging environment, GE employees are embracing a lean philosophy rooted in kaizen, “change to make it better.” They are delivering for our customers by listening, learning, and executing. Step-by-step, one process at a time, they are advancing safety, quality, delivery, and cost, in that order, serving our customers and each other with deep respect.

4.     Empowering people leads to results.

When you combine compelling purpose with problem solving people within lean systems in my experience you’ll find increasingly better performance.

The merging of great people with great purpose. The connecting of plans and performance.

5.     Kaizen is the magic that frankly becomes addicting as the improvements build on themselves and grow.

Like the example below my experience is the same. Improvement begets improvement. It is infectious.

Enter lean… through a kaizen event at our Lynn, Massachusetts, plant… Our goal: Take that 75 hours down to under 32, with one mechanic working at a time.

By the end of the week, engineers and operators working together on the floor identified opportunities both big and small; saving hours of prep time by using a heat gun instead of an oven to treat a compressor rotor, for example. The result was reducing build time to just 11 hours with one operator, all the while enhancing safety and quality.

75 to 11 is the kind of change that takes your breath away. But to me, the best part was the fact that on Thursday of that week, the team was already talking about how they were going to do better than 11; what they could do next.

That is the spirit of lean and kaizen. Always getting better. Your mindset shifts to look for opportunities at the most granular levels, day in and day out, to enhance performance and eliminate waste.

These steps, scaled and compounded across our teams, help customers and support our own businesses. This “power of the ‘and’”, as Jim Collins would say, is the magic that frankly becomes addicting as the improvements build on themselves and grow.

6.     People are our passion.

Respect for people is a key pillar of the Toyota Production System intentionally as they solve problems. They are the solutions. They create opportunities. They are the lifeblood of the company.

With unmatched passion and talent, the people of GE remain at the heart of our efforts, including reinventing ourselves. Challenges can become opportunities when humility joins with optimism, leading us to believe that a better way is possible.

7.     Challenge just good enough culture.

Status quo must be challenged. The just good enough culture must be challenged.

Our goal has never been good enough, or a company that’s just better off. It is to build a world that works better. Period.

8.     Leadership, humility and gratitude.

Embrace every opportunity. As a leader your making a mark on the lives of others and the community you serve.

I’m grateful for the opportunity of a lifetime to work each day alongside this team.

9.     Larry Culp’s Photo (see above)

Many CEO’s would have a professional board room headshot but Larry has a photo from the Gemba. He’s on the shop floor perhaps in a kaizen but at least seeing where the value is created. More CEOs need to do this and set the example for their leadership teams.

It’s great to see both examples of Lean and leadership in the workplace and no less together. What do you think? Are there companies that can learn from Larry Culp and GE’s new approach with Lean? I can think of few in the news recently.

Lean Quote: The Harder I Work the Luckier I Get

On Fridays I will post a Lean related Quote. Throughout our lifetimes many people touch our lives and leave us with words of wisdom. These can both be a source of new learning and also a point to pause and reflect upon lessons we have learned. Within Lean active learning is an important aspect on this journey because without learning we can not improve.

"I’m a great believer in luck, and I find the harder I work the more I have of it."   —  Thomas Jefferson

This St. Patrick’s Day some may be feeling the luck of the Irish but I tend to agree with Thomas Jefferson’s message about the relationship between work and luck.

Hard work provides a strong foundation upon which success can be built. It nurtures discipline, resilience, and the determination to overcome obstacles. By investing time and effort into honing their craft or developing expertise in a particular domain, individuals increase their chances of success. Hard work creates opportunities and opens doors that may otherwise remain closed.

Luck can manifest in various forms, such as being in the right place at the right time, receiving a timely recommendation, or encountering a mentor who provides invaluable guidance. While luck is unpredictable and beyond our control, it can act as a catalyst, accelerating one's journey towards success. However, it is important to note that relying solely on luck without the foundation of hard work is unlikely to yield sustained achievements.

The relationship between hard work and luck is not one of exclusivity but rather one of interdependence. Hard work creates the conditions for luck to flourish, and luck, in turn, rewards those who have prepared themselves through diligent effort. 

Success is a complex phenomenon influenced by a combination of hard work and luck. While hard work provides the foundation for progress and achievement, luck can serve as an unexpected catalyst, opening doors and creating opportunities. Ultimately, success is a product of the interplay between these two elements, with hard work increasing the likelihood of encountering fortunate circumstances.

The 3 Things That Keep People Feeling Motivated At Work

As part of TED’s ‘How to be a Better Human’ series, two researchers, Richard Ryan and Edward Deci, developed an idea called ‘self-determination theory’. Self-determination theory essentially argued that people are motivated when they can determine for themselves what to work on and how to work on it.

Below, I’ll outline the three main drivers of motivation according to self-determination theory — autonomy, competence, and relatedness — and I’ll provide practical ways to leverage the power of each.

1) Autonomy

This refers to how much people feel they can influence the work they do or control the output and outcome. It outlines how much say a person has in the way they do something.

The opposite, of course, is being micro-managed. If micro-management is about being told what to do and how to do it, autonomy is getting the person involved in deciding how it’s going to be done and showing creative initiative to get there.

·        Analyze how many times you ‘tell’ people what to do, versus how many times you ‘involve’ them in decision-making.

·        Mutually assign tasks and objectives for people, identifying and agreeing deadlines

·        Give them more freedom on how the task is completed, within certain guidelines.

·        Communicate the progress people are making to achieve the goals they are set.

2) Competence

We’ve always stated that a vital aspect of people’s drive is to learn, grow and develop. Becoming ‘better at stuff’ is one of the keys to motivation, so assist and support in helping team members to develop their skills.

·        Limit the amount of constructive criticism you offer. The research showed there were links between poor feedback mechanisms and poor motivation.

·        Share successes with people so they can see how much they’ve grown by taking more responsibility.

·        Give positive feedback when you can, specifying exactly what you are happy with so it can be repeated.

·        Look for opportunities to get your people learning and developing on the job, not just on training courses.

3) Relatedness

The research showed that, when people feel a connection between what they do and the bigger picture they are serving, there is an increase in motivation.

·        Ensure team members have opportunities to connect with others, even on a virtual basis.

·        Show people how the role they play interacts and contributes to others’ work, hence reducing the impacts of silos within the business.

·        Create a connection between their role and the mission of the organization.

·        Allow people to interact with each other more, so the feeling of belonging is enhanced.

Relatedness refers to the sense of feeling worthwhile and being able to contribute to the overall goals of each other as well as the company. You can naturally see how and why this would be a key driver of motivation.

When people have the ability to determine how they work, the means to judge their progress and the feeling that their work helps other people, they can’t help but be motivated to get to work.

Lean Tips Edition #296 (#3466 - #3480)

For my Facebook fans you already know about this great feature. But for those of you that are not connected to A Lean Journey on Facebook or Twitter I post daily a feature I call Lean Tips.  It is meant to be advice, things I learned from experience, and some knowledge tidbits about Lean to help you along your journey.  Another great reason to like A Lean Journey on Facebook.

Click this link for A Lean Journey's Facebook Page Notes Feed.

Here is the next addition of tips from the Facebook page:

Lean Tip #3466 – Deliver Coaching on the "Shop Floor"

The majority of your teaching and coaching should happen in the workplace where the process and the teams are operating. This ensures that there is a clear link between what the employee is learning and the environment in which they act in. In the case of manufacturing companies this would be the shop-floor while for service companies this would be where the process is operating or the service delivery to customers is provided.

Lean Tip #3467 – Help Employees Break the Problem Down into Parts

Teach them to break the problem into milestones or target conditions which need to be achieved on the road to achieving the final outcome. This not only ensures regular focus on the process on its way to achieving the final outcome but also makes sure that actions are taken early if things go off the rails. Review progress using a PDCA structure.

Lean Tip #3468 – Let Them Think for Themselves

Never provide answers to the person you’re coaching. Your approach to teaching has to be through a series of questions that helps the person to find the answer. They should learn through their own discovery as they work on the project and wors on the questions posed by their coach. The process of asking-questions to help the individual come up with their own answers – also known as the Socratic method - unfurls the thought process of the student.

Lean Tip #3469 – Teach Employees Not to Assign Blame to Individuals

Inculcate into the individuals that you mentor that problems happen because of process and the system not because of people. So whenever someone reports a problem or blames someone, the first response has to be to go and look at the process / system and not to point the finger at any one individual.

Lean Tip #3470 – Help Them Learn to See

Teach the change agents the power of observation. Employees need to be taught to look for both explicit and implicit things in a process. Can this be taught? Yes, it can be. Observation is not just about the process but also about the customers, the context in which the process functions, etc.

Lean Tip #3471 – Ask Guiding Questions

Open-ended, guiding questions lead to more detailed and thoughtful answers, which lead to more productive coaching conversations in the workplace. As a manager or leader, it is critical that you develop strong relationships with your employees. This will help you determine if your employees are curious, have the capacity to perform and improve, and what kind of attitude they have toward their work. 

This is where communication skills and emotional intelligence really come into play. Managers must guide conversations both by asking questions and listening, not by giving directives. Employees learn and grow the most when they uncover the answers themselves, making the techniques of coaching highly effective.

Lean Tip #3472 – Recognize What’s Going Well

Coaching (successfully) in the workplace requires a balance of criticism and praise. If your coaching conversations solely focus on identifying what’s not working and how the employee needs to change, it can be demoralizing rather than motivating.

Recognizing and valuing an employee’s strengths can provide a solid basis for growth and development. However, it’s important to avoid using the “compliment sandwich” approach, as it can often come across as disingenuous and lacking in authenticity.

Instead, take the time to genuinely recognize specific areas where the employee excels and let them know that their efforts are valued. Additionally, it’s important to consider how the employee prefers to be recognized. Some individuals thrive with frequent recognition, while others find occasional acknowledgment sufficient. Understanding their preferences, whether they prefer public or private recognition, is crucial in fostering a positive coaching management style. Openly communicate with your employees and ask about their preferred coaching techniques and examples of effective coaching in the workplace.

Lean Tip #3473 – Listen and Empower

Coaching requires both encouragement and empowerment. As a manager and a leader, your job is to build one-on-one relationships with employees that result in improved performance.

Your employees are likely to have a lot of input, questions, and feedback. It’s important for them to know you care enough to listen to what they have to say, so encourage them to share their opinions.

Some employees will have no problem speaking their mind, while others will need a LOT of encouragement before they share an opinion with you openly. Once they do open up, be sure to respect those opinions by discussing them, rather than dismissing them.

Lean Tip #3474 – Give Them Goals to Aspire To

Great performance coaches identify strengths and weaknesses within individual employees and help them take advantage of what they’re good at. This knowledge of their own skills and competencies allows employees to target goals that align with their strengths, and perhaps aspire to promotions and leadership roles.

Lean Tip #3475 – Empower Your Team to Manage Themselves, and Achieve More

Self-aware and communicative employees are engaged, empowered, and motivated. Armed with concrete knowledge about what they’re capable of and how they can continue to improve their performance in the office, employees are likely to be more proactive about managing their own advancement and goals in the workplace.

Lean Tip #3476 – Implement Continuous improvement Based on Customer Need

Unlike what many people think, sales (and other) departments have a big impact on the production system of a company. From my experience, most of the time those departments are disconnected from the production system and the needs of the customer.

Remember that the Lean principle of “Pull” is not a concept to be implemented in production areas only. When trying to optimize your processes, always look at the system holistically. Focus your investment on real customer needs.

Within an organization there are internal and external customers. Internal customers are people who work in the various departments that we produce work for. External customers are the end users outside of our organization. An improvement is only useful if it improves upon something that customers value. Before doing any work, we must be aware of who the customer is and what is their conditions of satisfaction to be able to deliver the desired value.

Lean Tip #3477 – Reduce Non-Value Added Activities

Draw a Value Stream Map and connect the production areas with non-production areas. Teach your people to distinguish between value added activities, necessary non-value added activities, and waste. Standardize your processes. Even creative processes can be standardized. Some experts say that around 80-90% of a supposedly creative process is composed of repetitive processes or methodological steps.

Lean Tip #3478 – Implement 5S & Housekeeping

Without having a well-organized office environment, it will be quite difficult to implement any Lean continuous improvement program. These simple traditional lean tools do not need much investment. 5S and a Kanban system can improve organization and efficiency.

Lean Tip #3479 – Use Visual Management to Control the Workflow

Use visual management principles to provide visibility of work-in-progress (i.e., status of orders, projects, reports, etc.). A visual communication system ensures that standards are in place so that work is completed on schedule. Visual Management should be implemented in the office areas as well as in production areas.

Lean Tip #3480 – Take Advantage of Digital Tools

First, I recommend the use of traditional manual solutions and tools such as color cards, post-its notes, and boards to standardize the process. When you have standardized the process, you can take advantage of digital tools including apps, touch screens, and cloud computing tools. My recommendation is to start with less sophisticated or free versions of applications and software. Once you have mastered the rules and routines, search for more powerful, expensive, or sophisticated tools if needed. Remember the 8th principle of the Toyota Way: “Use only reliable, thoroughly tested technology that serves your people and process”, a principle not yet well understood by many companies.

Lean Quote: Let Enthusiasm Drive Your Leadership

On Fridays I will post a Lean related Quote. Throughout our lifetimes many people touch our lives and leave us with words of wisdom. These can both be a source of new learning and also a point to pause and reflect upon lessons we have learned. Within Lean active learning is an important aspect on this journey because without learning we can not improve.

"Spring work is going on with joyful enthusiasm."   —  John Muir

Enthusiasm; intensity about a subject; willingness to engage others on their terms with respect to the threats and possibilities; deep knowledge about the subject; examples from one's own experience - all of these are marks of passion.  These are attributes that can be studied, learned, and acquired over time.  They grow from believing that there must be a better way for your organization to survive and prosper in a competitive world.

Passion is everything. Without passion there is no drive to succeed. It is the fuel of the will, and everything you do as a leader must express your passion. Passion is contagious and is easily shared. Passion will bridge moments of weakness and will drive you past your failures while reaching for your goals. Passion radiates from you and is easily detected by others.

Enthusiastic leaders are able to make visions come alive. They do this by being inspirational, and passionate and by breathing life into the vision via their enthusiasm and energy. Enthusiasm is infectious and makes leaders more credible. It’s the exact opposite of being dull and boring. It’s the enthusiastic transmission of energy that brings a vision to life for the leader’s followers.

A leader without passion isn’t a leader. He’s a paper pusher. Or a taskmaster. Passion drives a lot, and you can inspire so much in others through your own passion and enthusiasm. That doesn’t mean you have to be constantly cheery; it means you’ve got to believe in what you’re doing and what your company is doing.

The team will feed off your energy, your example. They will sense and follow your motives, so keep it positive. As you cultivate these behaviors in your own life, you will reap the benefits. Let enthusiasm drive your leadership.

Exposing The Common Myths of Standardized Work

A couple days ago I posted an article on standard work as a mechanism for facilitating and empowering improvement. By documenting the current best practice, standardized work forms the baseline for kaizen or continuous improvement. As the standard is improved, the new standard becomes the baseline for further improvements, and so on. Improving standardized work is a never-ending process. Standardized work is one of the most powerful but least used lean tools.

Unfortunately, there are many myths regarding standardized work that if followed create a flawed system. To prevent you from falling into this trap I will attempt to debunk several of these myths.

Standard Work Is Permanent

A common misconception is that ‘standardized’ is assumed to be permanent. This is not the case. It’s just the best way we know how to do the work today. Continuous improvement is always encouraged, once the current best method is understood and practiced in order to establish a stable foundation for further improvement.

Standard Work is Self-Created

Some think employees develop their own standardized work. The initial work standard should be developed by engineers (process owners) working with operators who are part of a team. Group leaders and team leaders then have responsibility for training employees on the standard work and soliciting their input. Once the process is operating at some level of stability, employees are challenged to develop better methods, but the methods are always reviewed by others, including management.

Standard Work is a Rigid Framework

Another common myth about standardized work is that many think of a rigid work environment where workers aren’t required to think. This is totally the opposite as I said above. Operators are part of the creation of the work standard and then are challenged to improve these methods. The standard creates a baseline by which improvement can be measured. Ideas should be discussed with group leaders and considered depending upon the consensus and buy-in from other members and shifts. Once consensus is reached then experimentation can be done to determine the effectiveness of the improvement. If it is deemed an effective change then the standardized work can modified and everyone trained in the new method.

Standard Work Reduces Training Needs

It is also believed that with standard work you will know everything about the job and therefore be able to train anyone to do the job. Standardized work is the process used by operators to define their work method through documentation and visual postings. This is often misinterpreted as a fully detailed description of the work and associated standards. Anyone who has read the standard work sheets would see that the work description explains the work elements in basic terms - not nearly enough information to read and fully understand the job. Job Instruction Training (JIT) is the method commonly used in Lean to transfer complete knowledge of a job to a team member. In my experience anyone who believes that a job is simple enough to distill down to a few sheets of paper underestimates the competency level necessary of their employees.

Standard Work Prevents Deviations

Another myth is that with standard work and visual postings employees will not deviate from the standard. This couldn’t be further from the truth. There is nothing in standardized work that will prevent deviation by the operator except the visual awareness of others. The visual reference is utilized by management for monitoring adherence to the standard which is done through periodic and regular audits of the standardized work. To ensure compliance to the standard, it’s necessary to poka-yoke or mistake proof the process to prevent deviation and make excursions highly visible.

Standard Work Only Applies to Shop Floor

Lastly, there are those that believe standard work is only for the shop floor. Standard work has been proven effective in many industries from the military to healthcare and everything in between. In particular, I think this is a technique that management teams must adopt. How we run the business should not be any different than how we do business. In my experience, those organizations that use standard work at the management level are more productive and effective.

Standardizing the work adds discipline to the culture, an element that is frequently neglected but essential for Lean to take root. Standardized work is also a learning tool that supports audits, promotes problem solving, and involves team members in developing poka-yokes. While standard work can be an effective foundation for continuous improvement it is important to recognize that it is not a one-stop shop for all that ails you.