Thoughts on lean leadership from the CEG Advanced Manufacturing Conference.

1. Leadership in Lean Production Systems
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2. Timothy J. Burke
► Current Managing Director for Spa City Management LLC
• Manage family holdings: real estate, investments, private companies
• CFO of Precision Valve & Automation, Inc.
• Brought the Toyota Production System to PVA
► Executive management, principal investing and investment banking
• 10 years with M&T Securities
• 2 years with Ernst & Young Corporate Finance LLC (now MacQuarie)
• 1 year with PriceWaterhouseCoopers LLP
► Experience with growth strategies, acquisitions and capital markets
• More than 40 deals, with aggregate enterprise value over $2 billion
• Advanced manufacturing, aerospace, defense, medical, electronics
• Worked with many best-in-class “lean” companies and CEOs
• Upstate NY (Albany, Rochester, Binghamton, Syracuse, Buffalo)
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Email: tburke@pva.net
Tel: 518-371-2684

3. Lean leadership is developing others: i.e. asking people to trying something new
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What is lean leadership?

4. Start by developing yourself (hint: these books aren’t about one-piece flow or 7 wastes)
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How to develop others
If you want to develop others, you must develop yourself
and do it visibly – make it a team sport

5. Step One: Take the word “lean” out of your vocabulary
► “Lean” manufacturing
► Just-in-time
► Continuous flow
► Continuous improvement
.
► Standardized work .
.
► Performance analysis
► Shop floor focus
► Cost, wage and employee cuts
► More part shortages
► Ford style mass assembly line
► Someone in the office thinks they can
do my job better than I can
► Inflexible way someone tells me to do
my job
► Paperwork
► People in my business
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What you will say What they will hear
You cannot succeed without shared vision.
You cannot have shared vision when people feel threatened.

6. Built in the 13th century, Charles Bridge has endured centuries as a world landmark
► Charles IV’s noble vision:
• Establish Prague as a trading crossroads connecting Eastern and Western Europe
• Use best materials, newest building techniques (including new egg-strengthened mortar)
► The failure of shared vision:
• All villages ordered to send eggs for the mortar to the royal palace without knowing WHY
• Word spread for a solution to the problem of transportation: HARD BOIL THE EGGS
• Hardboiled eggs are useless for making mortar
► A GOOD HIGHER LEVEL VISION AND A GOOD TACTICAL SOLUTION, BUT A
FAILURE OF SHARED VISION (100 YEARS TO COMPLETE)
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Action without shared vision = wasted time and resources

7. 7
Get people to buy into your vision
A lean production system is a
bottom-up culture, and can not be
imposed or “pushed down”
Done right, the lean culture will
“go viral” and outnumber the
anchor draggers
You won’t find anchor draggers on the production floor,
you’ll find them in the corner office.

8. Understand and Embrace Shuhari
Shuhari is based on mastery of Japanese martial arts
► Shu: “Obey the rule”
• Repetitive teaching
• Repetition until skill is mastered
► Ha: “Break the rule”
• Skills are automatic
• Deviations to respond to circumstances
► Ri: “Be the rule”
• Student becomes teacher
• Circumstantial deviations now part of the rule

9. Traditional American vs. Lean Strategic Management
Bringing it all together: Where Hoshin meets Gemba
Executive
Level
Organizational
Financial Goal
Management
Financial Goal
Supervisor
Financial Goal
Operator
Instructions
PUSH PUSH PUSH
Grow EBITDA
by 10%
Cut direct costs
by 10%
Increase
productivity
output 10%
Work faster and
harder
Hoshin:
Direction
Management
Gemba:
Workplace
50% market
share
“Catchball”
Reduce
changeover
time by 1.5
minutes
Traditional
Lean

10. Get those that share your vision to share it with others
Notable Quotes: "The Toyota Way to Lean Leadership"
The function of leadership is to produce more leaders, not more followers.
- Ralph Nader, consumer advocate
No institution can possibly survive if it needs geniuses or supermen to
manage it. It must be organized in such a way as to be able to get along under
a leadership composed of average human beings.
- Peter Drucker, expert on management
Go to the people. Live with them. Learn from them. Love them. Start with
what they know. Build with what they have. But with the best leaders, when
the work is done, the task accomplished, the people will say 'We have done
this ourselves. '
- Lao-Tsu, founder of Daoism