What if the tacit knowledge of every member of the team can be elicited, recorded and made transparently available to everyone? What would it mean for a business if the core knowledge of its people were accessible as a more and more coherent whole? One can only imagine the kinds of satisfaction, creativity, productivity and profitability generated in such a situation. However, if we agree that the consistent transfer knowledge is the core challenge as written in the Harvard Press book Deep Smarts, then we also have to accept Barry-Wehmiller CEO Bob Chapman’s assertion that ‘People-Centric Lean’ is the only way to go, because all tacit knowledge is found in individual human beings.
This is actually what people-centered lean practices are doing. Standard work evolves as existing and new tacit operational knowledge becomes explicit. Now, if we are to have a complete and sustainable transformation, the challenge is to apply lean principles to the domains of Strategy and Finance, plus all the back-office support functions, in addition to continuous improvement in Operations. In the August Scanlon E-zine (link?) I described how a ‘Captain’s Reality Check’ could allow the CEO to lay out the border and the pieces of the multi-thousand piece jigsaw puzzle that is a business enterprise. I also briefly discussed the practice of Nimiwashi, which could be translated as ‘preparing the soil for transplanting the seedling’. This highly developed set of practices for internal diplomacy among functions creates a policy environment where the groundwork for a decision is laid so thoroughly that when they actually get in the room to make the policy, the process is easy, rapid, and consistently optimized.
JM Juran, one of the founders of Total Quality Management, noted in 1948 that “To be in a state of Self-Control, a person must know what is expected of them; know how well they are doing; know what resources/options are available to improve.” If any of these three are lacking, Juran wrote, “a person can’t be held responsible.” Yet all too often enterprises hold people responsible without equipping them to be responsible.
Gil Friend, founder of Natural Logic, says it this way –
“To be successful, one needs to have AND know the:
– Goals and Aspirations for oneself and one’s organization
– Results created and Metrics for measuring them
– Resources to carry out the tasks and Capacity to do them
This means fully integrated Strategy, Feedback, and Implementation/Execution.”
When, and if, in the ‘C’ Suites and manager’s offices, North American companies figure out how to succeed at Gil’s challenge, we will enter a new era of business self-management, and start to fully compete with the new standard Toyota Motor Company has set over the last few decades.
Bill Hewlett got to the crux of the matter as clearly as anyone- “If you want me to tell you how somebody’s going to behave, tell me how they are measured”. In addition to the see-with-your-own-eyes reality of processes on the floor (known in lean circles as the Gemba), we also need a method to consistently discover the Organizational Design, Strategic, Operational and Financial Gemba as a whole. This see-with-your-own-eyes reality has to live in consistent and constructive conversation and collaboration among all the stakeholders in every discipline and reporting level of the organization. Or as Doc Hall would say, as a “functioning high-velocity learning culture.”
This kind of virtually-impossible-to-imagine cooperation and whole system stewardship of resources may only be able to happen if the people who lead and do the actual work become the drivers and co-architects of an evolving measurement system, with the CEO, CFO and senior leadership providing the environment in which it that continuous design and testing process can flourish.
Laying the foundation efficiently and effectively for building a Tacit Knowledge Engine (capture and leveraging system) requires a launch sequence of highly focused whole system measurement design and dialogue. The first step is a 1 -2 day CEO (Captain’s) Reality Check, which lays out the puzzle border in the form of a draft transparent model of how the organization’s behavior becomes the financial results, as well as defines and prioritizes business mandates.
Following that, in two half-day Measurement System Kaizens (collaborative problem-solving events), capacity for growing shared business acumen is developed through the people who lead operations and do the actual work. These people create together a model of how the enterprise is actually functioning, guided by the CEO and CFO’s outputs from the Reality Check. As this is happening in the room, the CEO and CFO are drafting a ‘sacred glossary’ of shared language and core practices that add all the disconnects in hand-offs through the overall value chain, behavior scoring options and intangibles to existing language about core intellectual property, core capital, values & mission.
Iterating the model as a team six times in weekly or monthly ‘Huddles’ sets up a working Key Performance Indicator (KPI) matrix in which hypothesis creation, assumptions definition and testing, and then KPI refinement, can be conducted using the scientific method. When the whole team creates its own model and define its own language, the connection of results to behavior begins to consistently be more clear to everyone, so it becomes possible to consistently leverage the biggest ‘bang for the buck’ on constrained resources as well as for aligned initiative to be taken at all levels, thus installing the foundation for whole-organization Nimiwashi.
Further Development Steps are then prioritized and driven by launch sequence to fully execute the integration of Equity, Participation, Identity and Competence. These include:
· Rationalizing the total company conversation through meeting grid and meeting map development, as well as facilitation specifications for a participative culture.
· Specifying decision-support linkages to legacy IT infrastructure
· Cascading basic acumen foundation through whole system practical transparency practices to all stakeholders – the floor and the board, the bankers, investors and accountants, and then the customers and marketplace as appropriate.