GA 316 | Leading During a Crisis with Sam MacPherson

I say this because your core values are your azimuth, your true north. And if you do not have a true north before a crisis, then you're not going to live up to that true north during the crisis.

Hi everyone. We recently facilitated a webinar featuring our friend Sam McPherson called Lean War how to Prepare, Survive and THR through a Crisis. Now this webinar was extremely popular. In fact, we capped out at the 1000 person limit within a day of announcing it. Now, as you may know, Sam McPherson is a former Green Beret and an international Lean and Leadership expert. During this presentation, Sam covers a ton of ground. He talks about how to lead and communicate during a crisis. He also talks about how to plan for the worst and how to use Lean prob solving to prepare for a crisis. He also gets into what red teams and blue teams are all about how to war game to test your preparedness for any type of crisis. He also talks about many other things including how to apply SMED or single minute exchange of dies to your crisis action plan. So be sure to give this webinar a listen. And as with all of our podcasts, please feel free to share this with friends and colleagues. And even if folks don't know anything about lean, we're all dealing with this coronavirus and so I think everyone would be better off if we maybe learn some things about how we can prepare for a future crisis and obviously how to make the best and to deal with this current crisis. Now, show notes for this episode can be found over@gembapodcast.com just look for episode 316. Again, that's gembapodcast.com just look for Episode 316. Okay, enough from me. Let's get to the show.

So Sam McPherson is a former US army infantry and Special Forces Officer. He's the founder of the Lean Leadership Academy. He holds a Master of Military Art and Science degree in Military and Strategic leadership from the U.S. army Command and General Staff College. He holds another Master of Military Arts degree in Strategic Military Plans and operations from the U.S. army Command in General Staff College. He also holds a Certificate in Leadership Development from the US Army War College. His professional experience includes Director of Manufacturing for Crown Holdings, Chief Operations Officer for Fountain Powerboats. Sam is a Shingo Faculty Fellow with the Shingo Institute. So quite an extensive background in leadership, and I really think that he is exactly the resource that we need to help guide us through learning how to thrive in a crisis, particularly in the current state the world is in today. I'm really looking forward to what you have to present to us.

SAM all right, thanks a lot, Steve. I really do appreciate the Gemba Academy community for letting me in the door today and kind of share a little bit of lean war games, how to prepare, survive and thrive through a crisis. So this is kind of new for a lot of folks, especially thinking about what to in the what if scenario. So I'm going to use some new terms today. I'll introduce you to some new concepts that mostly is being used today in the cybersecurity realm, but it's just as applicable to our operational environment. Today I'm going to introduce you to how we can do crisis management and prepare for it, and yet use the lean tools that we currently have in order to do a good job with that. The Joint Chiefs of Staff said that crisis action planning is all about risk identifications, assessment, resource prioritization, and risk mitigation. What risk cannot be accepted and what risk has to have a level of acceptance, because there's always going to be some level of risk. So the role of a leader in this particular process is to determine what elements of risk cannot have any acceptance of that risk, has to have low risk acceptance on it. And by means of saying, I will not accept high levels of risk in a particular area, that means you're going to have to accept some level of risk in other areas. There's never a no risk situation where you can advocate the risk of the risk abatement. So the capabilities of any organization of force do not allow us to be everywhere at all times. So we have to create an environment where we can prepare and operate during a crisis that will allow us to keep the organization moving forward and the communities that we support. So a couple of things that I'm going to mention today to give you consideration on is different kinds of events that that may or may not happen. One of those events is known as a Black Swan event. So, like I said, a lot of people in the cybersecurity realm now use this term. But essentially what this Black Swan event is, it's an event that is an outlier and is highly improbable and rare. So the concept of a black swan goes back to the the Romanization of the European belief that all swan were white, because that's what they were used to later on. European explorers during the 18th century discovered two black swans in Australia. So it's not that the black swans weren't there, it's they had never been discovered before. So in a lot of ways, a Black Swan event is not a First timer, generally speaking, it has occurred before but has not yet been discovered or recorded, or there may be little to no forensics evidence that's available to us to say that it ever occurred. So Black Swan event has occurred but has not yet been discovered or recorded. When they occur, they have extreme impact.

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The coronavirus COVID 19 is a good example of that. It's not that COVID 19 didn't exist in some form. It wasn't necessarily discovered or thought to be a threat. But when it became a threat, it had extreme impacts on health, transmission and the economy. Black Swans can be predicted retrospectively, but not prospectively. So if you have not discovered it and you're not aware of any recorded incidents of such a case, then you're not going to predict something that you have absolutely no knowledge about. But in hindsight, we can always look back and connect the dots and say, well, we should have seen it. And the best we can do with a Black Swan event is to look back retrospectively and say what we could have done better and more effectively going forward. The interesting thing about black swans and their brothers, the white swans, the Gray swan events is that we should use lower escalation and higher probability events in order to build our skills and our skill sets and our preparedness for when and if a Black Swan event should occur. And by assuming an event is improbable, what mostly happen is that people's governments and organizations become complacent and they lack preparedness. It's hard to prepare for something you don't think will ever happen or you don't even know could happen. Now there's another event that is more recognizable and it's what we call a Gray Rhino event. So a Gray Rhino event is a known unknown. The event is a known. And the probable risk that we've chosen to ignore is so if we ignore these threats, then the potential for the harm is greater. So like with the Rhino, you can see the threat, you can see the harm it could potentially do. We just choose to ignore it. And by choosing to ignore it, we don't put the resources and planning against it in case a Gray Rhino decides to charge. So the warnings are visible with a Gray Rhino event. And by choosing to ignore these events, people, governments and organizations are again complacent to something they know could be a problem, but it won't happen to us, or it doesn't happen in my neighborhood kind of mentality, but eventually it will have an impact. It's not a case of whether it will or not. It's a case of when. So what are some of the things that we can do from the Lean community to prepare for Black Swans and Gray Rhino type events? So before the crisis you don't necessarily have to learn a whole bunch of new processes and tools, you already have them. So what we're going to do is we're going to look at some of the things that we have in our Lean, Agile and Six Sigma community that we can use to prepare for or understand the potential for a Black Swan or a Gray Rhino event. So the first thing that has to happen before the event occurs is you really have to know who you are. So one of the things that I truly appreciated my years with Toyota and working with Toyota leaders is in the event of a crisis, they know exactly who they are, they know exactly what their core values are. So my first recommendation in the pre Black Swan event is to establish and live your core values. Now in Toyota this is referred. The core values are called the five precepts or five principles of the founder Sakichi Toyota, which were established about five years after his death by his son and one of his nephews. What those values were the values of the organization going on into the future and how they will live their life as a company and what they expect their internal values to be. So for, for example, for Toyota Material Handling, they have their core values based on Sakichi Toyota, but they're located in Columbus, Indiana. So they refined it from the Japanese concepts down to what do those core values look like, how you behave with those core values and what do they mean for the community of Columbus, Indiana? Not for California, not for New York, not for Japan, but for Columbus, Indiana. And in the Toyota Motor Corporation they have the Toyota Way 2001, which is based on the Five Precepts of Sakichi Toyota. And they are living values really kind of as a constitution to the organization. The other thing about living your core values is make sure it fits your culture or, or can reinforce and build your culture. Find a way before such an event occurs to make sure you've got peer to peer accountability of those core values. For example, Toyota Material Handling and Toyota Industrial Equipment Manufacturing in Columbus, Indiana. Once they had redefined their core values for a time in their obeyo or in their big room, what they call the adrenaline room, they posted up those five core values and every day they asked did we live our values today? Did we have a situation where we did not exemplify our values? So they held themselves accountable and even counted the number of times that they exemplified the values versus did not exemplify the values, and worked on it from a problem solving perspective. And so one of the things that the leadership at Toyota Industrial Equipment shared with me was that by holding each other as leaders accountable to those core values, it had the greatest impact on the organization and productivity for the last 30 years. Because they noticed how they behaved with each other in the perspective of the core values started to reflect in how they behaved with the team in the organization and those members outside of the organization. In the community. Make sure that you emphasize both the behavior and the results and that they are equal. So in Toyota, both behavior and results are equal. Results are not higher than behavior. So you must achieve good results through good behavior and then make them visual everywhere. So if you go into an organization like Toyota Material Handling, everywhere you go, you will visually see the core values of Toyota Material Handling and Toyota Industries. So everywhere you go, once you walk through the door, no matter where you move through the organization, you're being reminded of what you're doing. Core values are in the organization. I say this because your core values are your azimuth, your true north. And if you do not have a true north before a crisis, then you're not going to live up to that true north during the crisis. So it's important to build that accountability and define those core values long before a crisis happens, long before a Gray Rhino or a Black Swan event occurs. Because if you've had practice living your values, you won't stray from it when a crisis occurs. In fact, it will reinforce the fact that you have these core values. Once you start, once you are presented with a crisis, the other thing that you have available to you that you've probably been trained in in some way or form, is a structured problem solving process. In Toyota, this is called Toyota Business Practice or lean problem solving. So when you're going to try to find the potential for a Black Swan event or a Gray Rhino event, one of the things you want to do, because the problem doesn't necessarily exist yet, you have to hypothesize what that problem could be. So in the process of Toyota business practice, generally you're going to first clarify the problem. So where you're different, you have your goal, what the organization seeks to do, your ideal or target situation. And then you have, instead of having a problem that is a gap from the current situation, you have a what if situation. What if a virus affects our organization? What if we have a cyber attack? What if an earthquake affects our supply chain? So you have to project A scenario to create a problem that you can put a solution against using the problem solving process. One of the things when you get into a step two, break down the problem is to use something we refer to, that's a McKinsey tool, McKinsey & Co. Tool, called a MECE analysis. And so a MECE analysis means that we're going to look at things in buckets, but by looking at all the buckets, we will collectively exhaust the potential harms that might come to us in a Black Swan or Gray Rhino event. Then we'll choose which problem to tackle first and then we will, we will run that out to its logical conclusion. So, so in, in, in step two of the problem solving process, that is where you're going to break out and thoroughly understand from a man, machine material methods, Mother Nature's perspective. What, what if Mother Nature is a problem? What if we have a manpower shortage? What if the supply chain is interrupted and then you follow that out to potential root causes? This is really a funnel analysis and it starts with a divergent thinking pattern and then moves into a convergent process of solving the problem. You have to go back out to the funnel again when you start to think about countermeasures. So you go back to the MECE analysis and you develop all the potential countermeasures that you could possibly put against a particular problem, whether that's a cyber attack, whether that's a COVID 19 type problem, or whether you have supply chain interruptions. So follow out the logical countermeasures from a what can man do? What methods do we need to improve? What materials do we need to ensure information, material flow for, and so forth. So go back to your, widen out to a divergent thinking pattern and then narrow it down to more, more of a convergent process pattern after that, and then see those countermeasures through. So MECE means mutually exclusive, collectively exhaustive. This is a concept developed by McKinsey & Company. And when we do this from a lean perspective, especially in step two of the problem solving process, we're looking at our current methods or how method could be a problem. What about equipment, machinery, facilities? What issues could we have there that could contribute to a crisis? What material and information flow issues could we have that would contribute to a crisis? What about a manpower? So in this particular case, COVID 19 is affecting our manpower, but it's also affecting the economy as a result of that. And then there's Mother Nature, tornadoes, hurricanes and so forth. So when I was leading my operations at Crown, we used to Drill against a lot of Mother nature what ifs because we were in Alabama, so we would normally what if tornadoes, possibly hurricanes, which are more of a black swan than a gray rhino. But when I was out in Salt Lake City, we really looked at blizzards and other gray outs and the power power grid and so forth and looked at what could possibly be a problem for us. And then we would build contingency plans around those what ifs. Also, you want to take a look and do a SWOT analysis as a part of this process. So you want to look at your internal strengths and weaknesses and your preparedness for tackling this problem. It'll help you to develop a countermeasure plan and capabilities. You also want to look at external opportunities and threats. So the one thing about a black swan is that it is an external threat that you have not yet discovered. And a gray rhino is the same thing. But believe it or not, on the other side of such events, there can be opportunities to improve or take advantage of other parts of your business model that you never thought before. A good example of that is how companies like Uber have really grown through the COVID 19 experience because they are now delivering food to people who are now shut in or sheltering in place. Didn't see that coming, but the opportunity was there. Opportunity for such organizations to grow and expand their business base. The other thing you want to do is you want to take a long term Hoshin approach to this. So the company needs to look at these black swans and flush them out the same way that you would do a long term Hoshin plan. What could happen five, ten years from now? Not where do we want to be five, ten years from now, but what could happen a year from now, three years from now, five years from now, 10 years from now that we're not going to anticipate and then put together together strategic crisis action plans. Toyota Motor Manufacturing in Kentucky did this during the swine flu and bird flu seasons many years ago. And they built strong relationships with key partners, which we'll talk about here in a few minutes, to make sure that they built very strong strategic crisis action plans. Then you have to cascade that down to each functional area because there may be policy deployment elements that you have to change, such as personnel policy, workout policies, who might work remotely, who cannot work remotely. Would you have to instigate or activate a mandatory vacation policy for several weeks? So those are all policy decisions that may need to be done at the functional level and then cascade these crisis action initiatives down to each level of to the department level and down the shop floor level. And let these leaders at each level actually develop their plan and show how it connects to the overall company crisis action plan for whatever type of black swan or gray rhino you have prioritized. The other thing you need to think about when you're thinking about the long term Hoshin approach is the strategic environments that you are connected with that you need to plan what ifs for. So you need to think about what ifs, what can impact your products or your research and development in new products development. So here's where cyber security is important. Espionage could be an issue. Intellectual property rights might be an issue that you need to plan for. How you would mitigate that the solutions that you provide your customers, such as your services. So how will you support your customers and key stakeholders with solutions? What if, if a what if occurs and how will you manage your key components in the supply chain? So how will you make sure that you got the components that's necessary to keep your organization and your customers running? So these are generally considered essential activities or essential businesses such as repair parts, replacement parts. So not just for your customers, but for your key equipment. Do you have a repair equipment plan? Do you have materials necessary in case of a breakdown? So these are some of the things, this is an environment that you need to look at. And then how does that, how does environment, economy, energy and ecology affect this? So are the what ifs going to affect your environment, your economy, your, your energy consumption or planning and the ecology of the environment? I had one client at one point came into work in New Hampshire and they had a gas leak under their plant. Did not have any idea there was a gas line under the plant. It completely shut down the plant for several days. That, that was a black swan. They were, they did not discover that there was a natural gas, a natural gas line up under the plant, but yet there was a leak and it affected the entire organization. They were a component supplier to aerospace, so then it had second and third order effects into the military and civilian aerospace markets. So again, we have to think of the what ifs could happen and how it might affect the extended value chain and look at world markets and say what could happen in world markets such as China that could affect our product solutions, key components, and our service to our customers and our people. The other last strategic thing you need to look at is building, identify and building strong relationships early before a crisis. In what we call the strategic pillars. These are people who are connected to your organization directly or indirectly, that you must balance your Relationships with. So from a lean perspective, we always say customer first, right? So customer the end user. We have to look at that relationship and build that ahead of time. Key value chain partners, our shareholders, products and services. Clearly, we have to take care of our people. So customer first, people always. What's the plan? What's the crisis action plan for our people? And how do we build strong relationships with our people in our culture ahead of a crisis? How do we build confidence and psychological safety into a crisis plan? Because they will happen in one form or another. And people have to be confident in the organization's ability to ensure that they remain physically, emotionally and environmentally safe. Contractors and support services, build those relationships up your supply chain partners. Here you have to not only think about your supply chain, but what are the effects of a Black Swan event or Gray Rhino event on your supply chain, their supply chain and their supply chain supply chain. So second, third order of effects, which at some point may extend out of markets that you have strong knowledge about and predictability about. And then also look at the relationships with the community, the society and the governmental relationships, especially the agency relationships that you need to build strong relationships with long before an incident occurs. So plan for the worst, ensure the best outcome as a leader. One of the special forces terms that we use quite often is called a pace. Plan means primary, alternate, contingency and emergency. And so we want the ideal state to occur as a primary. And if we have a small, an event, small crisis, we have an alternate plan. The key here is in this particular situation, with Gray Rhinos, it's more of a contingency plan. And with Black Swans, it's an emergency plan. So you need to think about four levels of redundancy in your planning, not just where will we be 10 years from now, or our three to five year plan, or how are we doing this year? Look at the possibility that events that you do not have awareness of may have an impact on you. The thing about that, the more that you do the drills and the planning around this, you're going to build your leadership team as a part of that process. Build connections and relationships with the cdc, with female, the World Health Organization, your weather services, local physicians, and if you happen to have physicians and medical personnel on staff, build your relationship with them strongly. Have a plan for them with emergency responders. So going back to TMMK in Georgetown, Kentucky, when the swine flu occurred, one of the things that they did is they went to the cdc, they sent their doctors to the cdc, they had them trained by the cdc, they Took online courses on the CDC and when the emergency occurred they were embedded at the CDC as well as having some representation in Georgetown, Kentucky. And they updated their current situation every three hours to see what had changed. What actions do we need to take? So that's being pretty responsive in a crisis. Have partner physicians in the community or on staff and key personnel take online workshops offered by agencies like the cdc, fema, the weather service and the World Health Organization so that they have a plan and they're trained before an event occurs or before a crisis occurs. And then make sure you have a contribute to society plan. Once you stabilize your operation, then you need to reach out as an organization to the community and see what you can do to help. So you see that today with people making masks for making respirators and making sure that they go check on shut ins, delivering meals. These are all contribution to society plans. You don't want to just look out for yourself. You want to look out for yourself and your people and staff. Stabilize your key stakeholders. But remember, have a contribution to the community plan so that when things stabilize, you can now start to support your community. And then as you develop your plans, you want to blue team or rock drill your plan. And I'm going to talk about blue team and red team in just a second. So red teams basically are going to be looking for weak points in your plan. So these are some new terms for you. So let's talk about that a minute and then have a purple team that can take both the blue and the red team representatives kind of in a fusion cell environment or an obey environment and then find the weak points, discuss those weak points and revise your plan to countermeasure the weak points. Now we're going to talk a second about blue team, red team and purple team. Now most often we call these teams are part of what we call the bad pyramid, the build, attack, defend pyramid. Now you see the red team which is attack the defenses. That's our plan, our good plan. Blue team pursues the plan and defends itself against the crisis. Purple teams come together to countermeasure the weaknesses that the red team actually discovers in the blue teams plan. Then we have some other teams that can happen after a while, orange teams, yellow teams and so forth. Some more advanced knowledge of how to run crisis action sales. So we're going to focus on blue teaming, red teaming and a little bit on purple teaming right now. So what does a blue team do in war gaming? And that's what they do. They're planning the war and then they're going to execute their crisis action war plan. The Blue Team are your internal planning leadership experts, security advisors and other crisis advisors that may be external to your organization, but they're trusted in planning against a crisis. The purpose of the Blue Team is to develop a what if strategic a three plan with critical stakeholders. And then Blue team plans, plans, prepares and practices keywords practices, how to contain, control, survive and thrive in a crisis. Its purpose is to really develop a real time response in a crisis that's both for leadership, communication and containment and operations. And then its purpose is also to prevent a Red team cell, which is the other part of the war gaming equation, from winning the preparation battle. How do we use a Red Team to actually check for weaknesses in our crisis action plan? Well, Red teams are ethical hackers. This happens a lot in the cybersecurity realm. They stress your Blue team's crisis action plan and point out and find your weak points in the plan. The Red team members are not necessarily part of your staff, but could be from a sister organization or an expert agency, or more importantly, maybe even like Lean Leadership Academy, disinterested third party organizations who are experts in Red Team tactics. So one of the tools that we use is the United States Army's Red Team Handbook, which is designed around critical decision making skills in planning and preparation. And then the Red team also gives you feedback based on what they find in their ethical hacking. So Red teams will also spread false information to give you a little bit of propaganda or disinformation stress because this thing will happen. We'll always find out. If you don't tell the story that your organization needs to hear, the organization and others will make up the story to fill the gap. So one of the things that Red teams will do well, they will stress your communications plan to make sure that there's clarity in the organization about what the Blue team plan is and how to execute it in a crisis. And then Red teams attempt to penetrate and exploit weaknesses in your crisis action. A3 strategies. So red teams also attempt to conduct espionage that are provided by the crisis. So Red teams are very expert at looking for opportunities to get to accomplish other things that you weren't even thinking about. So Red teams also expose your decision making biases. One of the things that Blue Teamers often do is they create great crisis action plans. And no one wants to call their baby ugly. The thing about a Red team is they will call your baby ugly. And then you have to figure out how to live with that and how to recover from that going forward. And red teams report their findings to the blue teams for countermeasure planning. And if they join the blue team, then that becomes a purple team. The other thing that you can do from material and information flow from a Toyota philosophy perspective is remember that from a supply value, a value stream perspective and a value chain perspective, a short supply chain is a stable and secure supply chain. Now this is. I've seen a lot of articles lately about did just in time cause the COVID 19 support problem? Well, if it's real just in time, it isn't possible for that to be the case. Here's how. From a Toyota perspective, you want to implement the just in time system comprehensively with all of its subsystems, tools and management tools and components, and then implement level pull to ensure quality and flow to demand. You don't want to waste resources ahead of time. So you want to be able to make what you need when you need it, and that you have capacity to support anybody that needs to be supported. One of the things that Mr. Ono said about inventory is that your people cannot eat your inventory. So in a time when you need cash to survive as a business or capacity to support both other parts of the organization or other entities, then you don't want to tie that up in inventory and you surely don't want to tie up your capital in inventory. The other thing is make products where you sell them. Now this is kind of hard because we always want to expand to other markets. This is kind of where we're in trouble with the COVID 19 situation where we're trying to enter markets. So then we start to embed with the host country in a way that becomes unhealthy in the long run, probably was a gray rhino. But at some point when you start having all of your critical medicines made in a foreign country and a problem or an event occurs, a crisis occurs and they can drown you in the sea of COVID 19, so to speak. To quote the news lines, if they want to stress or cause problems for you as an economic power or as a company, make sure that you develop in country suppliers, that 80% of your suppliers are within four hours of less of your operation. The remaining suppliers should not exceed an eight hour milk run. And so, for example, at Toyota Motor Manufacturing Texas, at both ends of that operation they have over 26 key suppliers. So you should be able to look and develop your internal supplier network and it should be in country under predictable environments and conditions. The other thing you want to partner or purchase in country textile suppliers, an Example of this is Toyota Motor Manufacturing purchased a company out of St. Louis called Bodine, which actually produces the aluminum castings that are used for milling engines in West Virginia and in Georgetown as well as Huntsville, Alabama. So now you don't have to go outside of the continental United States to get a metals or textile supply. It's within hours of the operation, so it's not subject to duties, it's not subject to tariffs, it's not subject to some of the other issues that come along with long supply chains of textile suppliers. And develop your leadership team by helping your suppliers achieve the requirements just in time. So send your leadership team out to work with these suppliers to teach them lean, Six Sigma and agile so that they're part of the logic. And that's good for your leadership team because it develops them as leaders. And make sure that the relationships with your suppliers and key customers are win win relationships. You don't want them to hold inventory just in case for you. Remember, they need to win and be profitable just like you need to be win and profitable in a crisis. Also, you can use a SMED approach to a crisis action both before and during a crisis. So smed, for those of you who may know it more as quick changeover means single minute exchange of die. So it's a technique for changing over die presses very quickly in less than 10 minutes. That's what the single minute or single digit means. So make sure you conduct 5s so everybody knows where everything is and there's not there's place for everything, everything in its place. Separate internal tasks from external tasks and that even means internal and external of the operation. Standardize and train the internal and external tasks and make sure that people are competent in it. This is more of a pace plan approach as well. Primary alternate contingency and emergency task. Analyze and remove MUDA as part of the standardization process and before training. And then prepare crash carts with a little bit of NASCAR logic to it based on rapid response and fact based. In other words, you have to keep looking at what you need on a regular basis, minimal quarterly basis to say what's relevant in the next quarter to two quarters. And make sure you have those response materials ready in a crash cart ready to roll out just in time. And then drill. Practice your crash cart and crisis action rapid response process. And then after you drill it, make sure that you improve your response time by continuing to remove MUDA and then reflect. This is where we got more of the case of a plan do study action. In other words, adjust or create new standards to update your crisis action plan and then refine the plan and kaizen key elements of the SMED concept as you go on now. Leading during the crisis so leading during the crisis you want to always make sure that you already have a crisis action plan and that you practice just like we have just spoken about everything we just talked about. We want to make sure it's ready to Toyota has hundreds of crisis action plans and they don't dust them off when they bring them up. They look at them regularly and practice and drill to them. I also understand that Jim Lancaster at landtech trains his staff by running crisis action drills as well. So there's other folks in the lean community that do these things and I did this when I was leading as an operational leader, not just as Special Forces leader. Stress test your plan either through red team process or through an intense purple team process. Stress your leadership structure. Make sure you get the right leadership structure in the event of a crisis. Make sure that information and material and emergency aid flows. Make sure you have a priority plan for the flow of and who is the priority of effort in the case of an emergency? Create a fusion cell. Now this I'm often known as Mr. Obeya. So generally speaking I'm going to create a fusion cell or an Obey that's going to give me a visual understanding of what's going on, what's happened the last 24 hours, what's going on the next 24 hours. And I'm going to embed experts and stakeholders as part of that fusion cell and then communicate with greater intensity as a leader. Use radical candor. Do it regularly with your leadership team. Allow your leadership team and experts to brief their part of the facts. You brief, here's where we're going, this is what we're doing and this is what we're going to accomplish. And here's my expected outcome as a leader. So start with the senior leaders stating the intent and the expected outcomes. Let your key leaders, experts and staff brief the facts. Make those facts visual so no one has to remember them. And then as the senior leader you come back, restate your intent, the task and the desired outcome. So that's the last thing your team hears. Engage at every level in planning, drilling and communication from the shop floor all the way to your shareholders, the board of directors. So make sure everybody's in on the plan and that they practice the plan and that communication works for everybody. Know the limits and capabilities of your crisis response team. So even with the well planned out crisis respond team, there are limits. So Know what your limits are. Red Team oftentimes will help you see those and you have to make some decisions on what risk you might have to with your crisis response team. And then use videos to communicate with your remote teams and internal teams and extended teams. One of the things that former president Will James of Toyota Manufacturing Kentucky often did is as they were getting ready to implement the Lexus as part of the Georgetown offerings, he communicated very often through video communication. So he was constantly in the studio putting that out so everybody knew what the intent was and the direction they were going. You could do the same thing in a crisis action plan. Use emails to communicate transcripts and details. So you don't want to use emails to communicate your plan and what will happen. You need to do that on video or in person. People need to see your body language, they need to pick up on the non verbal communication. They need to see and hear your confidence in your plan and the plan that you guys have developed together. But when it comes to details or people needing a reference or transcript, use emails for transcripts and details so people can go back and look and study what you said in your live or video communication. Lead with purpose, clarity and confidence. Over 85% of direct reports to C level staff do not understand both the purpose of the organization. So you're going to need to communicate this very simply and very effectively. So if in a non crisis condition you have that lack of understanding, you can imagine what it'll like in a crisis. Create extreme ownership in your organizational leadership by giving them the task to come up with the plan. Make sure the entire leadership team in the organization helps to create the supporting crisis action plan. That's going to create extreme ownership. If you're the one that comes up with the plan, you're the only one that owns it and probably the only one that understand it. So getting organizational leadership and your team members in the organization to help develop the crisis action plan and preparedness for it. That means they're going to understand it, they'll have clarity and they will own that plan. As a leader, as a senior leader, where you can best influence, always let your leadership team and your organization know where you will be leading from. And if you move to another location, let them know where you will be and when you will be. So always post as a leader your schedule. Here's where I'm going to be. I'm going to be in the gimba, I'm going to be shop floor, I'm going to be out with a supplier. So they always know where to connect with you. They shouldn't need you for decision making unless it's critical decision making. They should be able to do that their self, but they need to know where you are if you're moving. Other leaders in the organization need to do the same thing. So make sure you share where you're going to lead from and where you can best influence plan. Do study action constantly. So in the crisis, like I said, Toyota is looking at new information every three hours or so. Nowadays you can do it more often than that, but don't get caught up in the paralysis of analysis. So don't look at it so much real time that you don't have the benefit of space to think, space to analyze, prioritize and decide. Establish clear and clearly understood accountability mechanisms for your team and the organization. As a leader, always establish your top five and have your leaders establish their top five for the day as part of their leadership plan. How are they going to influence as a leader in the organization today? And at the end of the day, review your top five. Red or red or green. You either accomplish it or you didn't. And if you didn't accomplish it, what's your recovery plan? Prepare your team to lead remotely and to take the initiative. So now we're seeing what it means to lead remotely and to interact and work remotely. And so there are things you need to do to prepare for that. Making sure that you got secure comms, that you have a way to do that that you're keeping with yourself. Schedule so people know when to expect you know to be online and communicating. One of the things that Rich Sheridan told me the other day is that one of the things that he does with his team while they're working remotely is they stay up in Google Hangout. So if somebody has a question, they just, they just bring it up in Google Hangout and then they will, they will come on the video screen. Use things like Zoom or go to meeting or Microsoft Teams. Establish operational security as well as secure communications platform. You might want to look and see if you need a VPN if you're going to work remotely. Even if you don't work remotely during a crisis, you need to look at operational security, securing the facilities internal and external and making sure you got secure communications inside and outside of the organization. Keep keystone routines and schedules. So whatever you were doing before that were key leadership and decision making platforms where you got together in the obey or on the shop floor. Then when you go to lead remotely or work during the crisis, keep those routines. People have already people Already know the content of what we're going to cover at those times so they can prepare for it. Broadcast decision making, milestones. Here's where we're going, here's what we're going to be doing phase by phase. Phase one, Phase two. Have a plan for every person to kind of play off the PFEP during a crisis. Everybody needs to know their roles. Defined roles for team members and leaders also allows for psychological safety so they know what their role is in the case of an emergency. Build mutual trust internally and externally. And what you want to do is essentially as an organization is become a beloved organization that the community is around you because they're going to support you. Because in times of crisis and before times of crisis, you supported them. Make sure you maintain employee wellness. So make sure that part of your HR department and even part of your video schedule, remote work schedule includes a wellness plan. Capture lessons learned as you go. Revise your crisis action plan and build capability and a capability improvement plan both in your talent, information and material flow. And then drill and rehearse your plan at every level from the shop floor to the board of directors. So an example of how we would do this where the fusion cell is basically using the obeya and make sure that you got a schedule that's a cue. First thing in the morning, make sure you clarify that hot start adrenaline room meeting. Here we have the CEO of one of my client organizations basically giving his top five for the day and he'll get theirs. Here's what's gonna happen. Here's what happened the last 24 hours. Here's what's gonna happen the next 24 hours. Here's the problems. Basically the process to process supply chain problems we're gonna work on as leaders today and then at midday check in and it's basically the halftime report. Make sure that you look at any problems that are emerging and then you come up with a countermeasure plan during that crisis to close out or countermeasure that problem before the end of the day and then report out during the day. Different levels of problem solving. If you're using an eight step problem solving process, you may have step one, step two. First thing in the morning you're going to cover some step three, step four during midday and at the end of the day, then you're red or green. You're going to go through the remaining steps of the process to countermeasure implementation. And then you're going to go over your top five plans with your leaders and make sure that You've been able to close out on your priorities and get your leadership task done. Make sure that if you see any personnel problems or so forth, that you have a solid plan for recovering personnel, materials and information before the next day. So after the crisis, everybody has a war story in a crisis, Black Swan event, Gray Rhino event is an opportunity for you to create your war story. So gather lessons learned along the way in real time. Record notes, questions, decisions and unsolved or unresolved issues that occurred throughout the crisis that never quite got resolved. Analyze performance and behavior during the crisis, the organization and your leaders and team and reflecting Kaiser in your plan. Then storyboard write and share your war story so that it helps become a culture activator and part of a fraternal event that will build the culture of your organization and help develop your organizational leaders and make sure your war story is visual. So I like to use a lot of storyboards and create a history wall that shows here's when we had the crisis and here's the things we did in the crisis as part of your visual history of your company. And always maintain artifacts, whatever things that became special to you during the crisis, make sure that you have an opportunity to capture those artifacts and bring those artifacts out as part of the meaning and story of your organization. So if you need help with your war plan, you can always reach out to me at samhealengleadershipacademy.com or at my phone number. And with that, thank you for your attention. What questions may I ask answer for you? Sam?

Thank you so much. That is a lot of information. We do have a few questions I'd like to run by you real quick. The first one, what is the meaning of hot start?

Okay, so hot start is a situation that man, machines, materials, methods, first thing in the morning, everything's prepared what we call pre production preparation or pre operation preparation so that any shift coming on is starting with a green condition. They have what they need, they have the material they need. They know what they're going to work on first. Everything's in the optimal condition for a perfect day, even in a crisis. So what we do is we check man, machine, material, method. Do we have the people we need? Are they capable? Are they in the right place? Is the equipment up and running and cycling and ready to go? No problems? Do we have the material we need? So those are the things that are controllables that will allow us to be able to spend more time focusing on the crisis if we've already prepared for the perfect operational Day. Got it, Got it.

Thanks very much. Okay, the next question. While you cannot plan for a specific Black SWAN event like COVID 19, terrorism, et cetera, can you plan for a general black SW that they wouldn't be a black swan.

More often than not, they would actually be white swans. These are like the Romans said, they knew swans were white. So those are crisis that you know will happen. And so you use the same process we discussed for black swans to build your chops for a black Swan event or a gray swan event. So. So you really want to use those light swan events. For me, in Alabama, tornadoes are going to happen. It's not a matter of if, it's a matter of when. So we used the process to prepare for tornadoes and other kind of events. And so when something happened like a black swan or gray swan occurred, that process of having exercised the planning process and drilling to that meant that we were more practiced in that planning process. So use your White Swan events, the known knowns and some known unknowns to practice for the thing that is an unknown unknown. Right.

Yep.

Yep. Very good.

Very good. Okay, it looks like we have time for one more question. To what extent do you include the frontline slash shop floor colleagues in these exercises?

Okay, so we do that all the way back in the Hoshin approach to this process. So if you, you know about. So the Hoshin process says that we may set out target conditions for the crisis and the potential failure points, but we don't give the sub KPIs for that the target conditions for that particular department. We basically ask them to say, if we want to achieve this target condition during a crisis, what should you as a department or a shop 14, what should you guys be monitoring in a leading indicator role that will make sure we're okay or that we can see that event coming? So the folks closest to the process or to the policy are going to be the folks that are going to be thinking about the impact of those policies. So what you want to do is you want to set out the what ifs and what your desired outcome during a crisis should be, but you let each level of the organization determine what should we monitor for my department or for my shop floor or for my or for my field environment that will tell me a crisis is occurring or that I'm on track to managing that crisis. Does that make sense? Absolutely does. Absolutely does.

Well, that is all of the time that we have for today's session. Sam, thank you again. Great topic, particularly for the times and the challenges that the world is facing. Right now very applicable. We sincerely appreciate you and for all the attendees, thank you again for spending the time with us to learn about Lean wargaming. And if we can answer any questions for you or serve you in any way, please feel free to contact us@gemba academy.com and use the Contact Us link. So once again, thank you very much and that brings us to a close. Thank you all and goodbye.

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