GA 555 | The Key to Successful Daily Management with José Ferro

We want to fix problems as soon as possible. We don't need to wait, we don't need to wait a meeting every day to do that. We should start the problem solving right now by defining the help chain and by asking help from the people that should be helping.

Today, I am excited to welcome Jose Ferro to the show. Now, as you'll hear, Jose has a really deep, long background with Lean. In fact, he was part of some of the original research that James Womack and other researchers at MIT did back in the 80s. So before this book, the Machine that Changed the World was written. And so this group is the group that actually coined the term Lean. And Jose was part of a team, part of that team that he really focused on in the Brazilian market. So Jose is from Brazil and he's got a kind of academic background, but he's been deeply involved in the Lean movement again for many years, really since the very beginning, since it was called Lean at least. And so he's recently written a book that is being published by Lei Lean Enterprise Institute called Daily Management to Execute the Strategy. And so that's what we talk about today. We talk about the book. And I always like to know, like, why authors write books and, you know, there's a lot of books on different topics, what problem are you trying to solve and so forth. So that's how we open up and then we just get into a nice discussion on daily management. And Noze shares quite a bit of what they wrote about and really what daily management means to them and how they sort of break that apart apart, how they tie things back to strategy, how they problem solve and other other topics. So I think it was a good episode and I haven't read the book yet, but I, I am planning to buy it and to check it out because it does sound sound really interesting. So show notes can be found over@gembapodcast.com this is episode 555. And again, scroll down on the app, whatever you're listening to, and we'll have links over to the book and, and, and to connect with Jose. Okay, enough for me. Let's get to the show. Jose, welcome to the show. How are you?

I'm doing fine. Thank you for inviting me, Ron.

You're welcome. You're welcome. So where are you calling in from?

I'm from Sao Paulo, Brazil. Yes, beginning of spring here.

Okay. I've been there actually. Well, to the airport many times when I used to work at Nokia and we had a plant there in Manaus, Brazil. And so we would Fly over Manaus, go another four hours maybe, or whatever it is.

Four hours long flight in Sao Paulo.

And then wait many hours, fly four hours back. It was not very lean, but hey, yeah, that's it.

You flew over the Amazon jungle. Maybe you saw some crocodiles.

Oh, boy. Yeah. When we were in Manaus, yeah, we would go. We went into the jungle and. Oh, man. Yeah, we took tours. And I never forget there was this. These monkeys, you know, like these. They're basically like trained pets. And his monkey came jumping up on our picnic table. We were having lunch and they grabbed the guy's Pepsi bottle or whatever, the monkey, and just started drinking the Pepsi. Never seen anything like this, you know. But, yeah, it was something pretty incredible.

We don't see this in Sao Paulo, Ron. Too bad. We see, we have buildings and the traffic jams.

Yeah, I know, I know, I know. Anyhow, well, good stuff. Well, hey, thank you for taking time, Jose, to come on to the show. Hey, as you know, we like to begin all of our episodes with our guests sharing a quote. So do you have one?

Yes, I have one. And Ron, the more we advance in our lean thinking journey, the more we spread this knowledge and this practice to as many companies and sectors as possible. And I like to have a quote by our friends from Toyota. They're still hanging tough. They're still tough with all kinds of competition and all kinds of natural evolution. New people, new changes in the environment. So going back to one of the Jeff Leiker's collection of Toyota Ways books, there is one with Gary Convis, co wrote with Jeff, and it's about lean leadership. And in the foreword, there is a quote by Akio Toyota when he had recently joined the company as a CEO. And in the forward, he said, there are always problems because we are never perfect. The only way we can really understand the problems is at the Gemba. So I think this phrase is very connected to our book, to our contribution on daily management. So solving problems start at the Gemba at the place of work. Yeah, so I like to use that quote for our conversation today, Ron.

Good, good, good. No, I like it, I like it. All right, well, hey, Jose, tell us a little bit about yourself. Tell us about, about your background and how you got into all of this continuous improvement stuff and, and then what you're up to these days.

Okay, well, I have a kind of academic career, Ron. I started as a researcher back in the 80s. I was a university professor here in Sao Paulo in a business school. And I had the opportunity to go over to mit to do my doctoral studies. And at the same time I joined the International Motor Vehicle Program that was led by Dr. James Womack, and they were doing some nice stuff there. And I had done previously research on the auto parts industry in Brazil. So this is how I got to be involved with the auto industry. And, and then Jim Womack invited me to join that program and he wanted somebody to study the Brazilian industry. So this is how I got connected with a wonderful group of people, both in the academic environment at MIT and also in the research front in the automobile industry. And as you probably aware, in the 80s, MIT had that big initiative on the auto industry. And they discovered that unlike many people thought that there was something special with the Japanese way of managing, but actually they found out there was no Japanese management style. And there was actually one star within the Japanese companies, which was Toyota, that had developed a new way of thinking, a new way of managing, and was so successful at that time. So that's what brought me into Lean be part of a research program where lean was first coined in the 80s, late 80s, early 90s.

So were you on that actual team with.

Yes, I was in the team. Yes, I was on the actual team.

So the machine changed the world came after this research? Yeah.

Yes, yes. So I was partially doing the Brazilian studies and helping a little bit with the Mexican industry studies. Yeah. So I did coordinated a lot of research into the Brazilian industry. And at that time, Ron, Brazilian industry was by far one of the worst in the world. The performance was bad, markets were protected. So I made some suggestions to the Brazilian industry that I was happy to find out later that they were accepted by the Brazilian government. So after I came back to Brazil, I helped shape a new policy, a new industrial policy for the Brazilian industry.

Wow, that's great. That's great. Okay, and what are you up to these days then?

Well, after that I kept contact with, with Jim Womack. He was still at MIT for some time. I still continue my collaboration with MIT in the research and I went back to the university. I went back to the university trying to develop similar research programs, but I found it very difficult here. I found the university environment was much more oriented towards academic projects and I want to do some practical. And when I found out that Jim Womack had created the Lean Enterprise Institute, I thought that was a wonderful idea. So I copy him, I follow him. So I created Lean Institute Brazil just one year after he created Lei Lean Enterprise Institute. And I felt that I could continue my academic work, but having much more practical influence in the industry. By the way, not only the automobile industry, but at that time, I felt we could make a contribution to the whole society, to the whole Brazilian society, which lacked concepts of efficiency, productivity, quality. So I felt that the lean concepts, the lean practices, could be very useful to the Brazilian society. So this is what I've been trying to do over the last 25 years. Help improve companies in Brazil and also a little bit in Latin America as well.

Got it, got it. Okay, well. And so you've also written a book that I believe is published by Lei. Right. Enterprise Institute. Okay. Called Daily Management.

Yes.

What's the full title?

Daily Management To Execute the Strategy.

Daily Management To Execute the Strategy. Very good, Very good. So one question I always like to ask authors is like, why did you write it and what problem were you trying to solve?

Yes, good question. We started actually with this kind of question and our work here in Brazil and also in many countries. I've been working the last 10 years with different companies in many different countries. So I've been able to travel around and to work with companies in different environments everywhere. We realized that most companies didn't have a good approach to disseminating their strategy to all levels of the organization. So strategy was something done up there and was never disseminated, was never deployed to every area of the company. So that was first inspiration to us. And eventually you would have companies deploying targets. Okay. And eventually deploy some action plans. But we didn't see a lot of life there, a lot of connection there with the real work, with the Gemba, like the first quote that I used today. So that was our inspiration. How can we help companies execute their strategy on a daily basis to close to the place of work where the work actually takes place? So that was me, our main motivation. Okay.

So one thing that I, you know, don't ever want to take anything for granted with folks listening. So when we talk about lean daily management, let maybe, let's. What is it like? What's your elevator pitch for what is Lean Daily Management?

Yeah, I don't, I don't. I don't. I don't want to call this Lean Daily Management, because that would be too. Which is our approach. Everybody has some sort of a daily management approach. Okay. I was in the hospital yesterday doing some routine checkup, and I saw the huddles. Huddles are very popular. I saw a group of workers connecting to one area, talking, you know, sharing information, and basically sharing information. That happens a lot. We have those boards, this visual management. So every company now has some sort of A visual management approach. You go there, you see information, you see boards with the performance, eventually you see boards with some reds there. What we don't see is this connection that we propose in the book, which is a connection between strategy, what are you actually managing on a daily basis, and the problem solving approach together in the same place. Daily management for us is not only sharing information or defining targets, it is the place where you connect the strategy to the actual work. So we have in the book, this is our approach. And a lot of our approach Ron has to do with the other co author, which is Robinson Govea. He worked with Alcoa, the aluminum company for many years and he learned that. So we use that approach as a foundation for our approach on our learnings. So we combine our strategy deployment efforts with the Robinson experience at Alcoa and they have something similar. So it's basically three blocks. One block is how is this area connected to the purpose of the organization and to the strategy? Which is not the same. You know, purpose of a company is not the same as the purpose of one area. You know, talking about a hospital, I was there yesterday, you know, a surgery room is different than the pharmacy where you place the drugs. So different purposes. The purpose of a hospital might be one, but it's not exactly the same as the purpose of a surgery center or the pharmacy. So this is the starting point. What's our connection with the strategy? What's our specific purpose? So that's our starting point is the connection with the strategy. And Ron, our experience often tells us that when you ask this question, sometimes we hear a long silence because the connection is not clear. People don't know what they're doing and what an area does to support the overall strategy. This is our first, we call this block run the commitment. That's the commitment from the area. That's what the area has to deliver and that the expectation from the organization from for the performance of that area. So that's the starting point, the commitment. After we define that, then we see what we have to control every day, what variables we have to control. It could be KPIs, it could be KSF success factors to make sure you achieve what you expect to achieve from that area. And I'm talking about area. It could be anything. It could be a manufacturing cell, it could be a manufacturing building, it could be a whole site. You know, it. It all depends on your starting point. We want to be close to where the actual work takes place and where the value is added. So we want to be clear. We want to be there, we want to starting point there, where value is added, wherever that is. And then after, after we do that, after we, the commitment from that specific area, we, as I told you, we try to define the variables that we want to manage, to control. And this is going to have to be translated into some specific daily targets. What do I want to achieve today? Every day. And then comes the fun part, which is like I said in the quote, nothing is perfect. We're going to have some problems and we're going to have some rats. Then the third block is the problem solving block. When we get there, we should have defined two things. What are the basic standards for that area? And second, what is the help chain? Because it's important, we want to fix problems as soon as possible. We don't need to wait, we don't need to wait a meeting every day to do that. We should start the problem solving right now by defining the help chain and by asking help from the people that should be helping when that cannot be happening because things are fast and you have to move on. So you do some kind of a mitigation and then you move on to the third part of the daily management, which is the problem solving process. So every day problems that couldn't be fixed are brought to the attention of the team, of the team, not the leadership team, the team, including the leadership. And then they should try to fix it, try to understand why they haven't been able to fix it before and what do they have to do to fix it now in that meeting? Sometimes that's not possible. Sometimes the problems are hard, we know that. And then we say, well, there are ways to avoid just letting the problems go. So make sure we do some kind of analysis, even a very simple analysis which is just writing down what's the point of a currency, where, where is this problem happening? And then after some time you can start having a more scientific approach to problem solving. Do some Pareto analysis, something like that, to find out the, the occurrences and then have the problem solving process. But this is the starting point. There is one level which we call the operational level. Then problems are not solved and the variables are not measured and controlled. Only at the operational level, there is only the managerial level. And then those problems that can be fixed at that level escalate to this other level of the daily management. And sometimes for that kind of a situation, maybe you don't even need a daily meeting. But that has to be connected with the daily management process because we are adding value every day. So that's that's why we want to focus on daily manage because we are adding value every day and that's what we need to be doing, helping that process.

You mentioned visual management earlier and I'm curious to hear how you see that. One of my favorite questions of I walk into any, any facility, whether it's a hospital or a factory or it doesn't matter. I like to go up to just anybody that just is trying, they're working and adding value in some way. And I asked them hey, are you winning or are you losing right now?

Yeah.

And you know a lot of times they'll say oh yeah, I, you know they might have a way like some hour by hour board or some something like that or, or sometimes they look at me like what, what do you mean? Am I winning or losing? Like where do you see this whole idea of just basic visual management playing a role in daily management?

Well, I think that's a very good way to say we are losing or winning on a daily basis and that's. We have to make that clear. First of all, if we don't have a clear target for what winning means then we don't know what to say. And often that's the case. Yeah, sometimes there are too many KPIs that you are always say I have a 25 I'm winning and five I'm losing. What does that tell me? I don't know. Sometimes it's too complicated. So this daily management process should be allowing you to focus on the most relevant topics for that specific area and that you should have a red or a green. And the red means I'm losing, a green means I'm winning. And sometimes my experience run is even companies that are more mature on this and they say I'm losing because here those, this is those targets that I'm not achieving then how do I know if you are really winning is by looking at your problem solving process. Because you might be losing today but your problem solving process is so strong that your reds clearly are going to become green in a matter of time. Yeah, but I don't see that much. Often I see sometimes the reds are there and people say I'm losing but then what they're going to do. What's her strategy for turning the game around? There's no strategy. So I'm going to, I'm losing and I'm continue to lose.

Yeah, yeah. That's a very, very un. Motivating, demotivating situation. Right. Like yes, when they hear the Gallup polls of so many people Disengaged and you know, actively disengaged. I think it's a big part of it.

Right. And also, also what we see a lot, Ron, you know, you, you, you, you are in the Gamba often and you know what I'm talking about. I presume most of your listeners are, are familiar with this. We sometimes we believe that at one point somebody would come and say, yes, we have a problem here and it has been taken care or is being taken care at this moment. And then you ask what is being done, who is doing it, when are going to be fixed this problem. And they, they don't know what's, what problem is, what, what, what happens with this problem is they disappear. They go into some kind of a black hole zone when they believe somebody is taking care of it and they don't know what's going to happen or somebody's doing an A3 on this. So what we propose, Ron, in this book is the problem solving process has to become visual. Where are you solving this? Because this problem is related to the people doing the work. They realize we have a problem here, so they expect that this problem is being fixed somewhere. So this is taken away from them. It's taken to an office, to a quality department, to a problem solving, to an improvement area. And it lost the connection with the place of work. Again, it loses the connection. You become expert specialists and then people that are doing the work, actually they are. The problem is there in the process there. So we want to make the problem solving process visible and again connected to the gate to the Gamba. We don't want to see this thrown out of the Gamba and being taken to an office to somebody that is, is not connected with the gamble, is far away from the gamble.

Mm, yeah. So what's been in your experience, what are the, what are some of the main obstacles to implementing daily management in a successful way?

Well, I don't know. There are many, many different companies with different maturities. What we have seen is this approach. Our experience has shown that this approach can be useful for companies starting their lean journey now. And you know, believe me, there are many companies that have no idea yet many companies that are successful somehow, but they have been immune to those ideas. And not only in Brazil, but everywhere we see this situation. So I think one of the first, when we talk about the three blocks, let's talk about that. The first block is the strategy, how to connect with the strategies. Sometimes we struggle because we don't know what's the purpose of a pharmacy within a Hospital well is to deliver medicine. Okay? So that, that first part is the commitment. And the connection with the strategy sometimes is not very clear or oftentimes is not very clear. So we struggle at times by defining that. And if we don't define that, we cannot progress because the variables that we're going to measure depend on this, depend on this definition of purpose. So sometimes we have to just get going because there's a block. They never thought about this. When you ask about a strategy of an area, they bring the corporate things and they put in the wall, I want to be the best in my class, in whatever. There's no sense. I mean, it doesn't make any sense for the people working there. This is so vague, so generic that there's no connection with the real work. So this is the first challenge. How can we link the purpose of the specific area and what are we actually caring about that will deliver the value to that, to that specific area? So defining the purpose, the specific purpose, is number one question. Second, second difficulty is somehow defining who is responsible for what. In those daily meetings that many companies have, it's often the case that people show up and eventually they don't show up and nothing happens. It's like it's randomly. I don't know, sometimes you. So we want to have some discipline in this process. Who has to be here with what responsibility? And if you have to be here, you have to be here. This is our commitment. And we're going to be meeting every day for about 15 minutes to half an hour to deal about this, to deliver this. So sometimes the discipline is lacking. So we make sure we thought about writing the book or not. Should we be so specific? And then we thought, well, we should. And we are. And the impression is, amazingly many companies don't have the discipline. A leader of the area shows up eventually or eventually he doesn't feel or she doesn't feel like or has something else to do and just leaves. At the meetings, you lose connectivity, you lose continuity, you lose commitment. So that's why we use the word commitment to that. Sometimes that commitment is not very. It doesn't exist as much as we want. So we want everybody showing up at the same time. People that should be there, they have to be there. People. If people are the help chain, they have to be in the help chain, they have to help. So this is the first challenge. The second challenge is defining what to measure, what to control. This is not easy. Sometimes there is an attempt to have, as I said, 20 metrics. And it's kind of hard to control. 20 metrics. Sometimes they are the wrong metrics. So that's another difficulty. Then the problem solving process. The problem solving process to make it visible, to connect what are mitigation issues, what are gap to standard issues. Sometimes that's not very easy. Sometimes there is a disconnect. People take the problem away. Well, it's going to be fixed someplace else, and people lose control of that. And then what's, what's invisible into this is leadership behaviors and attitudes. This is another point, you know, we have. We. We need to create some sort of a psychological safety around those meetings to make sure problems are welcome. People shouldn't be, shouldn't have to be afraid to tell the truth, to expose what's happening. And the leadership should be inviting them. So those meetings are excellent for developing this, this kind of a psychological safety area every day. So the leader creates that environment to allow people to think, to reflect, and to make a contribution. So those meetings are supposed to be learning meetings. So it's a learning opportunity for everybody. Learning about what? About the work, how to improve their work, how to do their work according to the expectations of the company and to connect their work with the purpose of the organization. So I think the change in the leadership, the mindset is also important. You can have a beautiful board. You can have a beautiful board, very articulated, very rational. But then if you put people there without the right approach, you're gonna destroy this.

Yeah, yeah.

It becomes very bureaucratic. You know, it becomes a meeting that's bureaucratic. People tell orders, you know, give orders in the meeting, inform. But that's not the real purpose of a daily meeting, of a daily management process.

Got it. Ah, good stuff. Well, hey, this has been a lot of fun, Jose. I'm, I'm. I have not read the book yet, but I, I'm gonna pick it up. I'm excited to, to, to check it out. It is available now, is that correct?

It is. It's going to be available just a couple weeks, Ron. It's okay.

Yeah. End of September. This, this episode won't come out for another month or two where we're ahead a little bit. So I think by the time this.

Episode should be ready. Yes.

Yeah.

Go to the LEI website and you get it.

Got it.

Yeah, got it.

Now, what about you? I know you're not on social media, right? I don't think you're on social media. Very smart, Very smart. But if folks did want to connect with you, is there a way, do you have a website or something like that.

Yes, you can, you can go, you can go to the link. I think I am on the LEI website. I'm a senior advisor. I'm a board member. So I think I have my, I think my email address is there. So if anybody wants to contact me, send an email through the Brazilian Institute website. It's very easy. It's pharaohlean.org pr I'll be glad. I'll be glad to answer any questions. I'm not in social media for personal reasons. I am 70 years old and I have, you know, I want to balance my life with a lot of work, a little bit of sleeping time and a little bit of, you know, leisure, social, family stuff. I don't want to use my, my, my personal life to do all this. Nothing wrong with that. No, no.

It's very smart. I agree with you 100%.

Yeah.

Good stuff. All right, well, hey, thanks for coming on. This has been a lot of fun.

My pleasure, My pleasure. Good talking to you.

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