How Can Lean Help Respond to Crises?

Being better able to cope with small–and large–crises is the point of lean. I remember years ago seeing a Toyota presentation at an automotive supplier about business interruption risk management. It emphasized that the only way to deliver zero bad parts to customers and 100% delivery was to be constantly on the alert for any situation that might lead to non-supply:

• Financial issues,
• Strikes and disputes,
• Organizational consolidations,
• Activity restructuring,
• Supply-chain remodeling.

This upside-down thinking made me realize that most of the management playbook is about changing things to optimize the current situation without regard for the increased business interruption risk this creates. Conversely, lean thinking is about engaging everyone every day in handling interruptions and learning to react better.

Crises are permanent. There are small crises we ignore or large crises we’re victims of. Picture yourself about to serve yourself a nice glass of wine. I’m sure that you’ve experienced that dreadful moment when the glass slips from your hand and hits the kitchen sink with a glassy clink. The destiny of glass is to break, sooner or later, so we have three kinds of interruptions:

• Glitch:The glass is intact. Relieved, you pick it up and pour the wine.
• Breakage:The glass shatters. You curse, clean up the mess, pick up another glass from the shelf and then serve the wine if you still feel like it.
• Outage:You discover that it was the last glass on the shelf! So now you need to either pour the glass in a cup (yuck!), abandon the idea of a glass of wine or drive to the store to buy glasses. In either case, you need to change what you intended to do and reschedule.

Faced with any problem, our instinct is to correct, rework, or reschedule. What lean asks us to do is look at the smallest incidents and ask “why?” so that we can create recognizable repeated experiences and learn to do the task with less risk of a glitch, a breakage or an outage. In my wine glass analogy this would be realizing the wine glasses are stored in a really awkward place and tricky to grasp.

Back to the Toyota supplier, I realized in logistics at the time that the just-in-time principle of a high frequency of trucks picking up every part each time from the supplier was not fragile – quite the opposite. Ten trucks per day picking up small quantities of every part gives you ten opportunities a day to fail-and-correct, and so to recognize the risks and then learn from this minimizes the conditions of the risks.

We’re now in the grips of the dreadful,  global epidemic of coronavirus COVID19 – a crisis of astonishing proportions. How can lean work in these conditions – or even help? On the gemba, I have the strange opportunity of seeing how lean thinking management teams react to the situation.

The first issue is understanding human nature, then coming up with a sensible reaction, and thirdly, learning as we go. In the very early stages of the panic everyone is, of course, trying to understand and scope the problem – how bad is it. With interruption risk in mind, we also realize that we’re dealing with people everywhere – we need to start with recognizing, acknowledging, and understanding the fear– out there and in here. In any fearful situation, people are bound to either:

• Ignore:Keep their head down and hope the crisis will pass them by.
• Overreact:Jump the gun, panic, and often trigger immediate disaster to stave off a future disaster.

 Amygdala Hijack

And it’s often an event that makes you switch brutally from one to the other (and then back to ignoring the issue when the crisis is past, so you can return to business as usual, which is rarely the case). The degree of fear changes both how people understand the problem and how they react – and we’re no different. We need to understand that faced with a vivid piece of news or a personal incident, our amygdala will hijack our brains, convince us we’re about to die, and throw us into fight or flee, which, in business terms is either deny everything or, conversely, proving you’re doing more than anyone else – thus overreacting.

The first lean step then is to put our people’s safety and feelings of anxiety first and set up a chain of help: Who do we talk to if we think something is happening. This can range from briefing the management line, to listening, to setting up a hotline number; if you fear you might be at risk, this is who to talk to and the first steps to take.

Then we need to balance the fact that life and the business must go on with handling the problem; how can we re-routethe work? In this present case, because of the difficulty of diagnosing COVID-19, this means facing the issue of people through simple self-quarantines at home and working from home. The problem becomes what support structures have we got in place? We need both a plan and a way to make the plan work.

We often think of war rooms as a place to put plans on the wall and to see how to implement them and adapt them – yes. But that’s only one half of the story. One of the original war rooms emerged in World War II during the Battle of Britain. British aviation had enough planes to counter a Nazi strike – but not to protect the entire coastline. The tactical issue was to spot early where the enemy was attacking to move all the planes there fast. A war room was created to collect timely information and direct resources to the fight.

In lean, we call our war room obeyas and the principle is similar: Beyond making each department’s plan clear and visible to the others the aim is to facilitate spontaneous collaboration so that people can help each other at points of strain. A spectacular case of this happening was studied in the case of Toyota’s 1997 Aisin fire when one supplier plant producing one critical component burned to the ground. Lean critics thought just-in-time would prove a failure because of the low inventory but the Toyota group restarted production in record time. An in-depth study of the event showed that the astonishing recovery was achieved by the loose cooperation of six main suppliers and a total of about 150 independent firms. The surprise of the study is that there was no central command, but deep independent cooperation based on relationships and problem-solving habits.

I’m not suggesting no organization at all – the emergency response team broke into sub-teams such as production, materials, customer liaisons, general affairs. The response, however, was orchestrated, not directed; each responder took on a contributing task and found its own way of doing it – ways that could differ from one firm to another. A central team coordinated information and had correspondents in the key production centers to coordinate and relay information and feedback.

After setting up the chain of help, the next lean step is setting up an obeya to outline the response plan and, critically, to coordinate responses between all the parties involved: Where do bottlenecks appear, who is close by and can help?

Finally, management must be on the ball to facilitate hitches when the process gets stuck as well as organize frequent communication to people impacted so that they can make alternative plans. In the current crisis, we see many large companies taking radical measures such as travel bans and so forth. On paper, this seems like forceful action. In real life, it takes away people’s own feelings of responsibility for what is going on as well as brutally interrupting the business. The end of crisis mode will be just as arbitrary and brutal when the pain has become too great and the supply chain must get restarted without any relation to the actual problem. (In Italy, museums were closed and are now re-opened with the instruction to say one meter away from each other – go figure.)

Thwarting Amygdala Hijack

The lean approach here is to emphasize individual responsibility: If you’re ill, stay at home; don’t go to red spot zones, and if you have too, understand the protections and consequences upon your return. What we need to coordinate centrally is the support for these individual decisions to increase personal responsibility and good sense, not to limit it. Management’s role is to communicate frequently and openly about the state of things as they’re understood and the intentions for people to make their own smart choices and collaborate.

Although lean might seem fragile to crises, because of low inventories, it’s quite the opposite. Lean thinking is about training to solve small crises – problems – daily. When the real tsunami hits, mental habits about reacting and learning from one’s reactions, relationships and coordination reflexes are in place to better deal with outage and its consequences.  Keeping “safety first, value flow second, cost third” in mind leads you to think in terms of “how can we re-route activities, who do we ask for help, and how do we coordinate initiatives.”

It might sound messy, but with hindsight, the outcomes are radically better than with rigid corporate knee-jerk reactions. In the COVID19 epidemic – let’s think of the patients first.