GA 317 | Implementing Lean at Starbucks with Karen Gaudet

The time between leaders making decisions in crisis that we need something done differently because the demand is not matching supply and the length of time it takes to actually mobilize on that decision and actually get the benefit of the front line to those who actually need it.

Today, I'm excited to welcome Karen Gaudette to the show. Now, prior to her current position with the Lean Enterprise Institute, Karen worked as a regional manager for Starbuck. And during her time with Starbucks, Karen and her colleagues made tremendous progress with continuous improvement, which enabled them to survive and ultimately thrive during an incredibly challenging crisis. Now, Karen documents this entire story in her new book called Steady Work. So, on today's show, we dive into the story as we talk about several things, including what defines a leader's value. We also talk about how standardized work actually displays respect for people. And then we talk about how the concepts of best thinking and best practices play together. Now, show notes for this episode can be found over@gembapodcast.com just look for episode 317. We're gonna link to several things, so this will be an important show notes page for you to go visit again gembapodcast.com and just look for episode 317. Okay, enough from me. Let's get to the show. Karen, welcome to the show. How are you?

I'm doing great. Thank you for having me on. It's a pleasure to be here.

Yeah. So everybody, when they listen to these podcasts, they think, oh, yeah, everything must just go so smoothly and painlessly. But we've had to reschedule this a few times because of schedule issues, mostly on my side. And then we had some technical problems yesterday. So thank you for being patient, Karen, and flexible and willing to work with us. We sure do appreciate it.

Oh, absolutely, absolutely.

So, Karen, well, today is. We're recording this. We don't normally say the date when we record these, but we're recording this on April 17, 2020. And obviously again, back at it. We have a lot of podcasts that are. That are recorded ahead of time. And in fact, I think this is the first. Well, we did sort of a Covid 19Q and A with some friends from Kinexus. So that was kind of a spur of the moment episode, but this is really the first interview that I've done since, well, since the pandemic has rocked the world. So interesting timing, considering the topic of today, of your book, Steady Work, that you recently released here in early April 2020. So congratulations on that, by the way.

Thank you. Thank you. It is uncanny times, for sure.

Yeah. Well, before we jump into the book, and really not just the book, but just many of the things that you're passionate about, Karen, tell us a little. Well, I want to get into your background and all that, but let's start with our normal process here. And do you have a quote that you want to start with, Karen?

Yeah, I would love to. So one of my favorite quotes, particularly in regards to what we'll be talking about today, is from Fuji Cho, who is the honorary chairman of Toyota Motor Corporation. And it is in reference to respect for people, and it is, do not waste your workers precious time. And more of the context behind that quote is around. Workers spend the prime of their life during work and working for us and with us. And it is then seen as disrespectful of their precious life to waste that time. And wasting that time or making something of no value with defects or the need for rework is predominant. And so it's management's job to make sure the time is well spent, that precious time is well spent and leading problem solving and helping to eliminate kind of waste in the work and work waste in the process to creating value for the customer. So really meaningful, super deep.

Yeah, for sure.

Yeah.

That's great. That's great. All right, well, Karen, let's jump into it. Why don't you tell us a little bit about your background. Tell us how you. I mean, I know that's part of this, of the story with your journey with Starbucks, but tell us a little bit about your background, even maybe before Starbucks, and then tell us what you're up to these days with the Lean Enterprise Institute.

Yeah, absolutely. So I was introduced into the restaurant industry, I'll say, at a young age as I was in high school, and over time and through time through school, worked my way through the many layers of the retail food industry and found my way to Starbucks Coffee Company back in 2002, and had the opportunity, during my journey with Starbucks to not only be introduced to the Lean operating system that was in process of being developed, but then play a key role in understanding how we would implement or spread that across the organization. And that is primarily the focus of the book study work. And then after many years at Starbucks, I had the opportunity, was introduced directly to Lei, though they were in my life before that period of time, kind of intrinsically behind the scenes as they were working with Starbucks and through many of the coaches. But I had a direct opportunity to be introduced to Lei and John Schuk and Mark Reich and the leadership team and decided to take on the opportunity of leading education with Lei that has evolved and progressed over the last few years. And my current role is as a team leader, part of the management team and support of operations and personnel, and work with a small and fierce team. Josh Howell is current president. Matt Savis is my direct kind of colleague. And then we have a team of additional 13 or so people. Great team members.

Yeah. Fantastic. Well, we sure have loved collaborating with LEI over the years and a lot of great folks there.

Tremendous team.

Yeah, for sure, for sure. All right, well, hey, let's jump right in. And I guess the first question that I want to explore with you is just the whole idea of value, and in particular a leader's value. So how would you define that? A leader's value?

Yeah, I see the value that a leader creates is really in the ability to work through other people and doing so to achieve the organizational purpose. For the leader, it's delivering on the promise of the business performance. For leaders, their work is their direct team and how you develop the capability of that team to deliver on that business performance. So it's really in building the capability of others, really. So the value the leader actually provides is how that shows up through others in the organization and how well they serve the people who actually deliver at the front line for the customer.

On a related note, when we think about the leader's value, essentially how they can serve and foster growth in others, what's your thought on leaders themselves growing as leaders?

Yeah, it is through actually developing others, you develop yourself. And clearly I had, I'll call it an unexpected experience through the transformation at Starbucks, because as you go into transforming how business is done and how the work gets done, you're working through your team members all that time, and through others, you change yourself. My experience with that was previously being recognized pretty significantly for having really good answers to problems and solutions and could read the financial reports and understand the aspects of the business pretty fluently and effectively. And then through the process of understanding the transformation and how the work and the thinking was done and the problem solving was done pretty differently at this time, recognized that I had an opportunity in helping others solve the problems inside of their work based off of how the work was standardized. And it was through that that I then was able to actually see my own opportunities and need for development and capability growth. So as I grew myself as a leader, they benefited from that through my ability to enable them to really solve critical business problems. So it's. It's part and parcel of the same.

Thing, I think yeah, for sure. Now, you mentioned standardization just now, but talk a little bit about standardization of work and, and maybe how that parallels or complements the whole idea of respect for people.

Yeah, so we. So through my experience prior to the transformation, I'll say that we had standards inside of the work. So by example, there were food safety standards, or there was a standard recipe in place for a particular beverage or what have you. And that was one thing. So that was a work standard. Through the development of the operating system, we developed common work routines or standard work routines that inside of one cafe previous to this, you might have multiple different people doing the same work differently. It created quite a bit of instability and variation in how the work was done. Through developing the common work routines that everyone would then follow consistently. It enabled team members, baristas, managers, district managers, and myself to actually see the work in the same way, which put us within the same thought process around how problems would show up against that standard. Our ability to be helpful in problem solving or facilitating the problem solving process against those problems grew exponentially in the efficiency of helping actually solve the problems. And so really demonstrating respect for those who are doing that critical work and being able to help with the problem solving process versus simply having differences of opinion how it should be done this way or that way, which they're on the front lines with the customer. And so, and particularly in a cafe environment, the customer is standing right in front of you as you prepare their beverage or do that work. It can be incredibly stressful, not only with a short period of time, but also the variation of customization that customers require in their orders to really demonstrate respect for the people on the front line and the critical work and role that they play in delivering on the promise of what we were doing, ensuring that their work was routine and we were able to help solve problems in an effective way pretty quickly was paramount.

So you mentioned, like before your team, let's call it before Lean. I don't know what else to say it at Starbucks. So if someone walked. So my favorite drink is I'll go in and I'll order, you know, a vanilla latte, two pumps of syrup, you know, so that's my drink. Yeah. Try to be a little healthy. Right. Two pumps instead of four pumps. I don't know, that's great, how much healthier it is. But before Lean, would that drink, was there potential that it would be made just radically different depending on where you were and who the barista was?

It potentially could have been. So this, the syrup that they pumped into your Drink would have been the same, and it would have been two pumps. However, it might have gone in first, it could have gone in last. It might have been at the end of the counter. It might have been in front of the barista working. It might have been in a third different location. And so all of those variations create space and time and inconsistency in the routine. And so by applying the work routine and lean thinking that centralized and standardized the sequence of work steps that would happen in building that latte with the two pumps. And so if I was making it or you were making it, we'd make it the same way. So if we had a problem with that, we could see that problem within the same scenario.

So no one likes the famous book who Moved my cheese? Right. No one likes it when changes thrust upon them. So let's say that one barista was used to the vanilla pump being, you know, over there to their left. And. And now the new standard says, no, it needs to be right here to the right. How did you work through that change management of, you know, moving folks cheese, for lack of a better word.

And it is such an intimate relationship the baristas hold with their. The artistry that they have with the work of making beverages for customers. It's a tremendous personal connection that they have with the customers. It's great. And so it was extremely sensitive. And the way that we chose to approach it was that we would go in and work with the baristas and go see. So we would observe the work with them and spaghetti map it and take different measures along with them. So they were able to see problems in the work the way that we had begun to see problems in the inconsistency. And not everyone for sure, you know, saw the value in that right away. It took some time, but it was through kind of demonstrating with them side by side, kind of standing, standing shoulder to shoulder with them. And true, genuine, you know, intention of seeing problems that we could help with, help them also kind of validate, you know, that is. That is better in this way. And it actually is helpful to have you helping solve some problems. So there was buy in.

Got it, Got it. So let's talk a little bit about. What do you mean when you talk about a leader led business transformation?

So that was an approach that was decided upon. And what it means is that the leader of the business unit. So in my particular example, I had responsibility for just over 100 locations. And it called on me to actually have the capability enough to be able to train and develop others in lean thinking and practice and the development of the operating system. And so instead of what might have happened previously, asking others to come in to learn it and train it, and I would be vicariously working alongside of that. This called on me as the leader to actually do that, which meant that I needed to go back in and learn how to make all of the beverages, do all of the work that was happening in the cafe, and then do it and learn the routines in a way that I would then teach and train my district managers. And then they would do the exact same thing and train their managers. And the managers would train the shift supervisors, the et cetera. And so it really requires the leader to understand how the work is being done at the front line. And the benefit of that is not only the development and the capability that gets built in the problem solving process throughout that, but it also enables the leaders, myself and others to actually understand when we're making higher level decisions, the impact those decisions are going to have on that frontline work. Clearly in today's time is just another great example. And for me at the time, it was Newtown. The ability for a leader to mobilize resources quickly and effectively, the more you have a good solid understanding of the work that's needed in order to implement those changes to get, you know, particular results in a short period of time of crisis. You're better apt as a leader if you understand those things to move pretty quickly and effectively versus just creating more waste or more problems for those who are trying to actually act on what you're deciding. Which is, I think, as we've seen in multiple different situations during this crisis, it's a significant problem, the time between leaders making decisions in crisis, that we need something done differently because the demand is not matching supply. And the length of time it takes to actually mobilize on that decision and actually get the benefit of the front line to those who actually need it.

So I want everyone to go out and buy Steady Work because it's a great book, I really enjoyed it. But maybe you can give us a sneak peek because we've been dancing around a little bit about a crisis, a crisis, a crisis. And obviously we're on our own crisis right now as we record this with Coronavirus and COVID 19. Wasn't the obviously the point of your book, there was a different crisis. Can you just touch on what was going on and caused you really to be able to tell this story?

Yeah. So at the time. So we began the lean transformation back in 2008 as an organization and Slowly and surely developed standard work routines for all the work inside of the cafe. And through that period of time, we were building our capability. Everyone within the organization, particularly in the cafes, from baristas, through management and all the way up through leadership to myself. And we were learning our way to how to then spread that learning. And then, as everyone is intimately aware of the Newtown Sandy Hook shootings occurred in December. And that happened to reside inside of the geography that I had responsibility for. And it became kind of the epicenter of significant demand changes. In a moment in time that significant community support was, was needed emotionally and physically. And it called on us to demonstrate the capability that we had been building. Pretty quickly we ended up, one of our team members was lost in the tragedy, and everybody was touched in one way, either directly or indirectly through that tragedy. And so our ability to have built the capability to problem solve at that level with the demand that was happening, as well as being present for the community and being able to kind of reach out to them and create a safe space for families and community members to gather in, it was pretty critical at that time. And so we didn't realize it at the time, but clearly looking back on it, recognized that we were able to respond in a particular way during that period of time because of the capability we had built over the previous multiple years. And applying lane thinking.

Another thing that you speak about, Karen, is the. The difference, maybe I don't know if difference is the right word, but the relationship between what we would call best practices and best thinking. Talk a little bit about how those two play together or are different.

Yeah, thank you for asking that question. So there is in the retail food service business, and likely across industries in, in different ways, a propensity to share best practices. And particularly as a leader in a large organization and in a growth organization, in order to get significant results pretty quickly, there is an attraction to sharing people's best solutions. So taking a solution that was applied to one problem and spreading it as a peanut butter solution pretty quickly across many locations. And what I came to discover and better understand through the process of transformation is it's really the thinking that needs to get spread. And how can. When someone develops the best solution to a critical problem, how can we find better ways to share the thinking process that was applied so that the thinking can actually be applied to all of the other common problems that are similar, but have unique differences in them that don't inadvertently cause other problems to show up? Because the solution that you received from one location isn't quite the Same problem. So it really calls on us to share thinking, which builds people capability and drive sustainability for the team members and the individuals inside of that work.

I love that. That's why many Toyota folks will say quit calling it the Toyota production system. Is the thinking production system, right?

Yes.

Yeah, it's a, it's a, it's all about thinking and it's all about learning. Right. And that's what I'm so passionate about now is like I almost tell people now, quit trying to solve so many problems, just start learning more and learning faster and the faster you learn and the better you think the problems will disappear. Right?

Yeah. And it links completely back to the respect for people. It's so, I'm so passionate about pushing people's thinking and really helping people think to their best ability and growing them through their ability to think. It's just. Yeah, yeah, it's too easy not to.

You know, just talking about thinking here. And here we are in, in the middle of, of this incredibly awful pandemic. Right. And, and thinking is just something that's not being always done so clearly. Right. Because it's so, it's such an emotionally charged situation. Right. Like right now with, you know, politics involved and one side hates the other side no matter what. And, and, and then just anxiety and, and depression or whatever it is. And, and, but if, but if we could just all think and just experiment our way through, it would be so much better. But it's easier to say that. Easier said than done, I guess, right?

It is, it is so much easier to say it than to do it. And it is a very dynamic situation happening from the politics to the fear to the real life impact. People are getting sick, people are losing their lives because they're not able to overcome this virus. And I mean there's real facts involved in, is getting to those facts and enabling those facts to push our thinking and staying focused on really what's the value to create and that is to help people live greater lives and longer lives.

So what advice do you have? I have a lot of friends that are, that own restaurants and it's not just restaurants that are hurting. Everybody's hurting. Right. In the whole, the whole world is hurting right now. But in particular, I mean you, you have a lot of experience with, with, you know, restaurants and businesses and, and coffee shops and things like that. So if someone's listening right now and they're, they're struggling, like what, what, what words of advice do you have or some wisdom that you might want to, want to give to that person. Yeah.

So they are hurting the restaurant industry, the food industry is significantly impacted. And we won't be able to reopen restaurants as we operated in the past. And it will take some significant thinking. You know, there is an opportunity right now with restaurants who are closed to create almost a lab environment, if they're able to inside of their restaurant before they reopen to the public, where they could actually start to model out and test some new ways of doing work that provides for social distancing for their team members as well as how to do no touch deliveries of product and resources to get their supply chain up and running. How to actually, if they're not already in delivery or pick up business of some type, how to figure that out and take advantage of this time that they have actually that, that is incredibly impactful of being closed to redesign how they do their work. But it starts, I believe it starts from actually understanding the work. So going in and actually doing the work and try to redesign it in a way that enables the things that are going to be required for any of us to actually operate on some level when we're able to reopen.

Well, even just outside of the restaurant industry, I mean, just thinking about all the, you know, the zoom calls or whatever it is being done right now, I'm going to be genuinely interested to see, you know, two years from now, you know, are people realizing that, huh, maybe we didn't need to jump on that airplane and fly across the country for that two hour meeting, you know, and I'm just wondering what kind of other, you know, you could call them benefits. I mean, maybe the airlines wouldn't call it benefit. They want them to fly across for that two hour meeting. But I don't know, in the spirit of productivity and efficiency for businesses, I'm just going to be really curious to see what happens.

Yeah, absolutely. And how the different businesses redefine the value they provide to their customers and how their customers actually would describe that value as well. So what's their purpose and doing that is completely up to be redefined. And how do they create greater connections with providing safety from a distance perspective and. Yeah, yeah, it's a fascinating time. Fascinating.

Sure is. All right, well, what's going on with Lai obviously, I mean, things are changing for every company. So how are you guys working through this?

We are, we are in the middle of redesigning what we do. So we, you know, provide education first and foremost and that comes by way of publications or books clearly off of our website. And then also we were doing in person trainings and larger events. We have redesigned all of that to go virtual. So we have, we transformed our summit into a virtual learning experience that will kick off in the fall. We are doing remote training, so interactive remote coaching and training sessions. And we also just kicked off a new Slack community, actually, so that we could respond right now in the moment to those who are on the front, frontline trying to solve some pretty critical problems. And people can reach it off of our website right off the landing page. It's Slack Pound Lean community. The link is there and we've got quite a few members coming in and people are sharing what their problems are in the front line. And it's intended to really help people get away from the noise sometimes of public social media where there's a lot of commercialization or advertising. And so this is a place for, for folks who want to benefit from peer to peer lean thinking and present their problems that they're dealing with and have, have help trying to solve them and work through them.

So there's folks just go to lean.org and then they'll find a link off of that.

Yeah, it's right on the landing page.

Okay, cool. And what will link to everything in the show? Notes for this podcast. So this is. Let's see, this will be 3:17. So GembaPodcast.com look for episode 317. We'll link to that. We'll definitely link to Steady Works. Again, great job with the book and I enjoyed reading it and highly recommend everybody else listening picks it up.

Thank you.

But yeah, Karen, thank you for coming on and sharing your story. Keep up the great work and, and give my best to everyone there at lei.

Absolutely. Thank you so much. What a great pleasure it's been.

All right, take care.

All righty, Bye Bye.

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