- Flow means the customer must always come first
- Complex problems evolve lean thinking into flow thinking
- Leadership must evolve and become distributed in Flow-based systems
- Psychological safety is critical to detect weak signals
- Teams need to learn how to be teams and apply teamwork training
The Origins of Lean Thinking, and its Limitations
Lean thinking has been based predominantly on the Toyota Production System (TPS) and The Toyota Way. TPS was developed between 1948 and 1975 according to various historical records I have consulted, and is usually credited to Taiichi Ohno, but we must not forget Eiji Toyoda, the cousin of Kiichiro Toyoda who created the Toyota Motor Corporation (TMC), who collaborated with Ohno in developing TPS, and who is considered its creator.
The Toyota Way was delivered by Fujio Cho in 2001, the current honorary chairman of TMC, and in his own words “we have identified and defined the company’s fundamental DNA, which summarizes the unique and outstanding elements of our company culture and success. These are the managerial values and business methods that are known collectively as the Toyota Way.”
People often confuse TPS and Toyota Way when writing, mixing up the principles and ideas from each. It has been said to me that the Toyota Way is TPS explained for the non-manufacturing parts of the company. I like that.
So lean thinking has not really evolved from its roots for a while. People continue to interpret and rework TPS and Toyota Way to suit their version of transforming the way an organization functions, but little new thinking is being applied. Even in the Agile world many of the ideas are based on or firmly rooted in lean thinking from TPS. Almost all Agile and Scrum classes taught use Toyota as a model for their base ideas of thinking.
The limitation with lean thinking is its linear nature and the way it tries to eliminate variation, or at least smooth it out to manageable levels. It is, at its heart, a production or assembly system. It is designed for standardized repeatable processes through which we establish high levels of quality and are able to eliminate waste and non-value added activities. In this context, lean thinking is the right approach.
PDCA and Scrum, which is a form of controlled or disciplined PDCA, are based on empiricism or inductive reasoning [Bacon 1620], where we base conclusions and future decisions on past performance or results. PDCA was not developed by Toyota, and it is unclear when they started using it, but it seems most likely that they were influenced by Kaoru Ishikawa and the Total Quality Management approach. PDCA also predates Deming’s PDSA, tracing its roots back to Japan’s first ever quality course called the CCS Management Seminar. CCS was the Civil Communications Section which rebuilt Japan’s communications after WWII. Deming’s lectures with JUSE (Japanese Union of Scientists & Engineers) followed the CCS courses, and it was Charlie Protzman who co-created the CCS course that invited Deming to conduct the lectures. Deming then taught PDSA which he always credited to his mentor Walter A Shewhart, the father of statistical quality control.
PDCA serves us well in linear thinking and in the transitional areas between complicated and complex work. However, when we are drawn into complexity or chaos, this approach is insufficient. As we move further into this disrupted world we now live in, with its global expansion of markets and choice as well as its digitization, we need to apply new tools and thinking to solve complex problems. We are moving from inductive reasoning to abductive reasoning, a form of logical inference (moving from premises to logical consequences) which starts with an observation, or set of observations, and then seeks to find the simplest and most likely explanation for those observations. This is a key concept in studying artificial intelligence. Simply applying lean thinking and lean tools is not enough. Lean does NOT go away; the tools and deep principles underlying TPS remain useful and powerful, but only when applied in the correct context.
TPS is also a closed system where the interactions between subsystems are controlled as a means of maintaining the system. Working in a complex world involves dealing with open systems where the interactions come from self-organizing functions that are capable of learning, adapting, and transforming to meet the challenges of their environment.
Understanding The Flow System™
The Flow System™ is not a new Agile or Lean framework. Indeed, it is not a framework at all, and it’s certainly not a one-size-fits-all solution. What is presented is a system of understanding, a system of learning.
Many project management methods and agile frameworks concentrate on taskwork and planning with no regard to how an organization is structured to support these activities, seeing them simply as a linear progression of tasks. Scaling frameworks tend to struggle or simply not work as they do not recognize that they are operating in a complex adaptive system which can only scale through continuous decomposition and recombination, which they are unable to do with their rigid doctrines.
Organizations and institutions utilize teams but fall short of developing teamwork skills and fail to restructure leadership to maximize the benefits that can be obtained from the utilization of teams. These shortcomings introduce additional constraints and barriers that prevent organizations and institutions from achieving a state of flow.
Creating a PMO (Project/Program Management Office), or a KPO (Kaizen Process Office), or something similar will never result in transformational change in an organization, yet organizations still insist on doing it this way, driving change through compliance. In the same way, training classes and Kaizen events, or blitzes, do not result in sustained change. These approaches give the false perception of being Lean or Agile. But in reality, little changes in the fabric of the company. These efforts are soon considered failed initiatives, resulting in Agile/Lean being not right for us. This results in fake-Agile or fake-Lean where organizational leaders declare that Agile or Lean is ineffective.
What we need is a change in culture driven by behavior changes focused on continuous learning and value with a new way of thinking, moving away from cause-and-effect to visualizing and interpreting patterns. Behaviors define culture, so if you don’t like your current culture you need to look at your behaviors. We need to move away from command and control, into distributed leadership which empowers the workforce to focus on value flow. Training is valuable, but to sustain a culture of change that flows requires behaviors to change at all levels, not just at the operational level.
The Flow System™ provides a re-imagined system for organizations to understand complexity, embrace teamwork, and leverage autonomous team-based leadership structures.
Achieving a state of flow occurs when organizations and institutions produce outcomes in which their structure and processes are unconstrained and when employees concentrate on their own interactions among one another and the customer. Flow ultimately results in employees concentrating on the act of doing rather than combatting inhibiting constraints.
The Flow System™ is a holistic FLOW based approach to delivering Customer 1st Value. It is built on a foundation of TPS and LEAN, plus a new triple helix structure known as the DNA of Organizations™.
The Flow System™ provides the understanding of different methods, patterns, practices, and techniques that enable organizations or institutions to achieve their desired outcomes.
The Flow System™ consists of three core principles:
- Customer 1st
- The FLOW of value
- The Triple Helix of Flow™
It Starts and Ends with the Customer
Since 1946, Toyota Motor Corporation has always placed the Customer first. In May 1946, Shotaro Kamiya, the first president of Toyota Motor Sales Co., Ltd. Japan, was the first Toyota executive to publicly declare that “the primary focus must always be the customer”.
That Customer 1st promise has been enshrined in The Toyota Production System and is often drawn as the cornerstone of the three principles underpinning TPS. Consideration of the customer’s needs is foundational when determining the direction and strategy of the organization. The customer 1st promise produces three outcomes:
- Highest Quality
- Lowest Cost
- Shortest Lead-Time
The Flow System™ recognizes that this still holds true today, and that no organization or institution will ultimately succeed if they lose focus on the customer. We understand that without the customer, we have no employees, no investors, no shareholders, and no investments for community development. The Flow System™ is influenced by, and built on the foundations of TPS and the Toyota Way, and together with The Triple Helix of Flow™ it starts and ends with the customer first.
The Flow System™ follows a tradition of customer-focused value that seems to have been lost in recent times, and this has contributed to many failed ventures. Deming famously said “‘GOOD QUALITY’ and ‘UNIFORM QUALITY’ have no meaning except with reference to the customer’s need”. Peter Drucker stated that “there is only one valid definition of business purpose: to create a customer”. The first principle of TQM is: Quality is defined by customers’ requirements.
In this disruptive, digitized, and global age we see traditional businesses failing as they are unable to adapt to the customer or market trends. Linear thinking is no longer sufficient. Remember, Nokia did not fail due to competition from another phone company, they failed because they were unable to see and adapt to competing forces from a computer company. Big box stores are failing today due to the rise of an online bookstore! These are complex and real problems.
The Triple Helix of Flow™
The Triple Helix of Flow™ consists of three individual strands of organizational DNA: Complexity Thinking, Distributed Leadership, and Team Science. They form The DNA of Organizations™.
The Triple Helix of Flow™ relates to the interconnected nature of the three helices. The triple helix identifies the interactions between and among agents (e.g., people, machines, events) that emerge into new patterns, networks, and knowledge to advance an organization’s ability to be more innovative, adaptive, and agile when operating in complex environments.
Implementing the Triple Helix of Flow™ will require a level of organizational transformation to take place. A transformation is necessary to assure that each of the three helices are indeed truly interconnected, synchronized, and embedded in an organization’s structure, allowing for seamless movement from ideation to value delivery to the customer.
Flow is achieved through the interactions of agents in a nearly constraint-free environment when using the methods, techniques, and tools identified under each of the helices in The Flow System™. It is recognized that the needs of one organization or institution is very different compared to others. This results in each organization or institution implementing different methods, techniques, and tools to achieve a state of flow for their purpose.
It is not the aim of The Flow System™ to utilize, practice, and master every method, technique, and tool listed. What is critical is that each organization or institution find the best methods, techniques, and tools from each of the three helices to allow them to achieve their desired goals by implementing new practices through interconnecting the three helices into one cohesive system that delivers uninterrupted flow.
The concept of FLOW is an evolving process, as the components of complexity thinking, distributed leadership, and team science become more interconnected over time, flow becomes even more seamless, natural, and unnoticed.
Flow is an evolving concept with knowledge gained from multiple fields of study (e.g., anthropology, biology, ecology, physics, psychology, team science). As an evolving state, a system’s configuration must evolve, adapt, and transform into new structures that support delivering seamless processes free of inhibiting constraints capable of operating in disruptive and complex environments.
Flow is a collective social motion in which individuals, or agents, learn to understand and react to their environment to obtain the goals of delivering value to the customer.
Flow is not only associated with movement or motion. One misnomer is that if the product or work item is moving we have lean product flow. This is not correct. It is not necessary for the product to be moving to have flow of value. All motion or movement is a waste, even if some is unavoidable in order to do the work. Do not justify waste as necessary waste just because you have to do something wasteful to accomplish an activity. Waste is waste.
Lean product flow means providing a continuous flow of value-added activities. The intent is to remove all non-value added activities and focus purely on value-added activities. This is a key concept in TPS and is carried through in The Flow System™.
Creating a flow of value requires organizations to configure themselves to enable Customer 1st outcomes as highlighted in The Flow System™.
Complexity thinking is a new form of thinking to aid in understanding uncertainty and complex adaptive systems. To begin transitioning to complexity thinking, it is first essential to understanding that not everything can be predicted due to unknown-unknowns that are present in complex environments.
Complex environments involve multiple possible states, varying from location to location, and can change conditions rapidly over time. Most dynamic environments that organizations encounter will have various states of complexity defined as simple, complicated and complex. Understanding and accepting variety in one’s environment is essential to complexity thinking.
Once an environment has been identified as being complex, complexity thinking can be applied.
Complexity thinking involves two primary steps:
Step 1: Understanding the characteristics of complex systems.
Step 2: Have a worldview or perspective that systems, entities, and events are complex adaptive systems.
Operating in complex environments is an exploratory process where the whole is not understood completely. Complexity thinking, in part, aids in being able to focus on what cannot be explained as opposed to focusing on what can be explained. Abductive reasoning gives plausible conclusions with no verification and so does not positively verify it. Outcomes, therefore, are ambiguous and uncertain but may be determined as the best available or the most likely option. Due to this uncertainty and complexity, complexity thinking provides a set of methods, techniques, and tools that have been identified to help navigate these waters.
The simplest and most often cited example of distributed leadership is the famous ANDON Cord. In Toyota’s Production System, production can be halted by an employee pulling on what is called an Andon Cord. It consists of a pull cord that runs the length of the production line, or sometimes a button that workers can activate to stop the production and warn management in case of a significant issue or even the perception of an issue.
Employees freely pull the Andon cord when they see a problem with no fear of being reprimanded or punished for stopping production. This acts as a metaphor for a psychologically safe working environment where employees are free to question and probe to assure the right decisions are being made, or the right actions are being taken. It also ensures the right people are taking those actions. Dr Amy Edmondson is doing pioneering work in the field of psychological safety.
It is also closing the Power Distance Index [Geert Hofstede] as we shift decision making closer to the people actually performing the work or activities. It flattens out unnecessary hierarchies and enables more rapid, and potentially better, decision making.
The concept of distributed leadership can easily be translated into leadership that extends horizontally, vertically, and anywhere in-between within an organization. Leadership begins with the individual and the model of leadership becomes a collective construct.
Leadership is developed and practiced at the individual level with self-leadership and self-efficacy development techniques. Shared leadership becomes the model of leadership at the team level with a functional leadership model acting as the oversight of the teams.
Functional leadership views the leader-team relationship as opposed to most leadership models that view the leader-follower dyad. Functional leadership, also called boundary spanners, operates in the boundaries between teams and between teams in multi-team systems. Their roles and responsibilities include providing resources, fostering interactions, coordination of activities, and alignment of goals, to name only a few. At the executive or the C-suite level, leadership can remain in its traditional hierarchical structure if desired.
Research has shown that many team-based structures and multi-team systems have functioned well using a hybrid style of leadership. A hybrid, or blended, leadership model is proposed in The Flow System™. This hybrid leadership model incorporates components of the following leadership theories that have been shown to work well with team-based organizational structures and for complex environments: strategic leadership, instrumental leadership, and global leadership.
Strategic leadership provides a vision and road map allowing an organization to evolve and innovate, and provides the ability to learn; adaptive capacity, the ability to change, coupled with managerial wisdom, the ability to perceive variation in the environment (to identify weak signals) [Boal and Hooijberg, 2000] [Boal and Schultz, 2007]
Instrumental leadership is the application of leader expert knowledge on monitoring of the environment and of performance, and the implementation of strategic and tactical solutions. [Antonakis and House, 2014]
Global Leadership has to connect people across countries and engage them in global team collaboration in order to facilitate complex processes of knowledge sharing across the globe [Gehrke and Claes, 2017].
The distributed leadership helix of The Flow System™ provides a process that constantly revives leaders throughout an organization, allowing the collective leadership to emerge within an organization that is capable of making bold and disruptive moves across an industry.
The other key area is the focus on teamwork and team training; this can be found in the third helix for Team Science.
Team science recognizes that teams are dynamic, cross-disciplinary, multidimensional, and complex adaptive systems. The helix of team science in The Flow System™ utilizes the benefits of using team-based structures to address complex and disruptive environments.
Teams need to focus on building teamwork skills through team training. Team training can be defined as training in which teams are used to increase individual procedural knowledge and proficiency in doing a job (taskwork), along with developing interpersonal skills (teamwork) to function as a cohesive unit or team (performance). Teamwork training focuses on the team as a unit, rather than focusing on any single team member.
Teams must be trained in teamwork skills for them to be effective teams. Teamwork skill development has been found to be the one key ingredient that separates poor performing teams (no teamwork skill training) with high performing teams (with teamwork skill training). You cannot achieve high performing teams without first developing teamwork skills.
Teams must also be experts at defining goals. Team goals must be well-defined, have measurable outcomes, and be linked to an organization’s overarching goal. All members must know how each are related to one another.
Teams that focus solely on their own goals have been found to be dismissive of the overall organizational goal, further separating the team from other teams and disrupting the overall process.
Individual teams have their specific goals (proximal goals) that guide them toward goal accomplishment. These team goals must also be structured around the overarching organizational goals (distal goals). Team goals must be in alignment with organizational goals and all team members must be aware of both sets of goals and their connections. Both proximal and distal goals must be defined where multiple teams collaborate.
Another key area is Red Teaming. Red Teaming rigorously challenges plans, policies, systems or assumptions by adopting an adversarial approach. A red team usually consists of impartial observers to gain new perspectives to effectively countermeasure weaknesses in decision making. Team members are then able to use the information gained and implement the proper corrections in the next exercise.
Red Teaming techniques include challenging explicit and implicit assumptions, exposing hidden information, and developing alternatives to uncover unseen biases. Red Teaming techniques include critical analysis of the team’s processes which requires a team to have already developed a high level of psychological safety and to have developed teamwork skills.
Again, these are not exhaustive, but some of the key areas we think organizations need to focus on.
Stop Assessing and Start Coaching
We developed a tool which we have been giving to teams and organizations we have been supporting. This is a Kaizen Dashboard (see example picture).
In essence, we empower teams to self-assess and self-correct. For each work iteration, be that a Sprint or other defined period, we provide teams with a method to rate themselves objectively, as a collective, on their performance. The Kaizen Dashboard enables each team to define their own categories. In the example provided, they have chosen Product Ownership or Management, Team use of Scrum, and their Technical Practices.
For each iteration, the team discusses how they have performed and rate themselves using simple visual symbols. In the example provided, we use a circle, triangle, or a cross. These are symbols common to Japan. The team then discuss how to make improvements in areas that need improvement, they can then prioritize improvements over time. This gives each team a sense of ownership. This method is based on the concept of Ji-Kotei-Kanketsu (self-process completion) and is paraphrased as building quality into the work process with ownership. JKK is considered one of the secrets to Toyota’s success.
Teams then own the improvements, gain a sense of self-respect, earn trust, and are empowered to make changes. When implemented, we have seen significant and rapid improvements that are sustainable. Teams use this dashboard as a living and visual artifact that is displayed for all to see.
Evaluating teams should be focused on teamwork skills as opposed to focusing solely on the team’s outcome or performance. Performance alone is a poor indicator of a team’s capability of working as a team. Evaluating teams is achieved by using a variety of techniques and tools, some focused on short-term measures, others designed for observing how a team interacts, while others highlight longitudinal techniques viewing the team over a long period of time.
When evaluating teams, it is the composite of each of these different measures that provide a full picture of how each team is operating, and no one method will provide a complete picture. These tools and techniques, in addition to team training, are presented in The Flow System™.
Coming Soon …
The Flow Guide will be published by the end of November 2019, and this will evolve and improve just as the patterns and learning in The Flow System™ evolve. This is a complex adaptive system after all. The book is finished and will be published in early 2020. It will explore all the concepts in The Flow System™ in great depth. This will be followed by a field guide with case studies and real-world applications as we document the tools and patterns and how to use them. Find out more by visiting The Flow System™ website and The Flow Guide website.
The Flow System™ was created by Nigel Thurlow, Professor John Turner, Commander Brian Rivera and is Offered for license under the Attribution license of Creative Commons, accessible here and also described in summary form here. By utilizing this Site and any information presented you acknowledge and agree that you have read and agree to be bound by the terms of the Attribution license of Creative Commons.