Leveraging Analytical Systems Thinking to Drive Improvement with Mark Graban

16 | Leveraging Analytical Systems Thinking to Drive Improvement with Mark Graban

Become an Analytical Systems Thinker

Are you focusing on the right problems in your organization?

More importantly, are you creating the conditions and processes in your organization to effectively solve them?

In this episode of Chain of Learning, Mark Graban and I explore the importance of developing the skills of an Analytical Systems Thinker—one of the eight core competencies in my Change KATALYST™ model—to catalyze truly meaningful change.

You’ll gain a better understanding of how to make informed decisions and drive improvement by applying the right kind of analytics instead of reacting to all the ups and downs in your metrics.

Mark also shares ways to think more systemically about processes across your organization.

We explore why fostering an experimental culture and responding kindly to mistakes is crucial for driving organizational innovation and improvement.

In this episode you’ll learn:

✅ The difference between leading change and leading actual improvement

✅ How monitoring metrics and experimenting move the needle in a statistically meaningful way

✅ How to react less and lead more effectively by mastering the art of interpreting data to discern statistical signals and genuine performance shifts

✅ What it takes to create psychological safety and encourage continuous organizational improvement

✅ The importance of how leaders respond to mistakes to create a culture of learning, problem-solving, and innovation

✅ The importance of modeling, encouraging, and rewarding candor to create a culture where mistakes and learning are embraced

If you’re looking to advance as a continuous improvement change leader—one who not only leads change but also creates real improvement—this is an episode you’ll want to tune into now.

Katie and Mark Going to Gemba in Japan

My Japan Study Trip Participants from October 2023

In this episode, you’ll also hear why Mark is thrilled to join me for my Japan Study Trip in November 2024.

These executive trips are a high-value opportunity to observe lean principles in action and understand the heart and soul behind creating a culture of continuous improvement.

I’m thrilled that Mark and many other leaders from around the world will be joining me – and would love to host you too.

Don’t take my word for the incredible impact that the Japan Study Trips have. Check out the testimonial webpage and hear past podcast guests Shawn Carner and Patrick Adams talk about their experiences. You can also watch Mark and me talk in more detail about the November 2024 Japan Study Trip program in this previously live discussion.

If you’ve ever thought of elevating your leadership to the next level, submit your application now to join me in Japan.

Listen Now to Chain of Learning!

If you’re ready to transform into a leader who can navigate the continuums between asking and telling, advocating and inquiring, being an expert and coach, this is one episode you don’t want to miss.

Watch the conversation

Watch the full conversation between me and Mark Graban on YouTube.

About Mark Graban

Mark Graban is one of the best Analytical Systems Thinkers I know – with degrees in Industrial Engineering and Business – and has written several influential books about how to create cultures of problem solving and innovation – including Measures of Success: React Less, Lead Better, Improve More and The Mistakes That Make Us: Cultivating a Culture of Learning and Innovation.

Mark is also a consultant, speaker, prolific podcaster and thought leader in the space of lean, quality, and operational excellence. Mark just celebrated 500 episodes of his Lean Blog Interviews podcast and I was excited to learn that I was one of the top 5 guests with the most appearances (see links below for some of the episodes).

Mark and I have been friends and colleagues for nearly two decades now and he is an important link in my Chain of Learning!

Me, Carol Dweck, Mark Graban, and John Shook at GE Lean Mindset Event in September 2023

Reflect and Take Action

How are you using data to help you and your leaders make informed decisions? 

How are you using a scientific approach to problem-solving, ensuring that you’re defining real problems, understanding causes, and running experiments to find solutions? 

And how are you creating an environment where mistakes and failures are embraced as part of the learning and innovation process? 

If you haven’t yet downloaded my Change KATALYST Self-assessment, go do so now. You can learn more about each of the eight competencies to help you be an effective transformational change leader, including being an analytical systems thinker. This will give you the opportunity to reflect on your own skills and opportunities for growth. 

And be sure to go back and listen to Episode 9 of this podcast to learn more about each of the competencies.

Important Links

Listen Now to Chain of Learning

Listen now on your favorite podcast players such as Apple Podcasts, Spotify, and Audible. You can also listen to the audio of this episode on YouTube.

Timestamps:

00:00 – Driving change vs. leading actual improvement
04:53 – Defining characteristics of effective Analytical Systems Thinkers
07:09 – The process of value stream mapping and system dynamics
09:29 – The Measure of Success & advice for leaders looking to use data to inform better decision-making
16:21 – The risk of wasting time & resources if you remain in a reactive state
21:42 – The importance of mistakes for a culture of learning, problem-solving, and innovation
34:53 – Key takeaways from Mark’s and Katie’s experiences in Japan and the value of going on a Japan Study Trip
42:20 – Mark’s best piece of advice for other continuous improvement change leaders

Full Episode Transcript

Mark Graban:
When something goes wrong or when there’s a mistake, you can acknowledge the impact. And like, to me, that’s being kind, like, that’s being respectful. You can say, okay, well, this has had a serious impact on our customer, or it’s created a real risk. I think you can acknowledge that that’s different than being nice, of keeping people protected from that. And again, like, just, it’s not like taking a dog and sticking their nose in their poop if they’ve pooped inside the house. It’s not that at all. It’s just treating people respectfully and saying, here’s the impact of the mistake. Here’s why it’s so important we focus now on learning and prevention.

Katie Anderson:
Are you driving change or are you leading actual improvement? What’s the difference? Tune into this episode of chain of learning for my conversation with mark graben to learn more. Welcome the chain of learning where the links of leadership and learning unite. This is your connection for actionable strategies and practices to empower you to build a people-centered learning culture, get results, and expand your impact so that you and your team can leave a lasting legacy. I’m your host and fellow learning enthusiast, Katie Anderson. How often have you found yourself leading change project after change project or running from crisis to crisis, doing your best to put out fires, solve emerging problems, only to discover that you weren’t fixing the actual, real problems at hand and that the changes you implemented weren’t leading to real, sustained improvement, just creating more work, adding complexity to the system, and taking a lot of time and resources? Or even worse, people in your organization are afraid to bring up problems and challenges in the first place because there are fear of being blamed.

Katie Anderson:
So how can you get out of this trap and make sure that you are making better decisions about what the real problems are that need to be solved in your organization and that you’re leading an effective process to solve them? I’ve invited mark graben the chain of learning to help. In this episode, mark explores how you can use data to inform decision-making rather than just reacting to all, all the ups and downs in your metrics, how to think more systemically about processes across your organization, and why creating a culture where experimentation and mistakes are embraced is so critical in driving innovation and creating meaningful improvement in your organization. These skills are all part of what I call being an analytical systems thinker. One of the eight core competencies in my change katalyst model, which you can download@kbjanderson.Com katalyst with a “k” katalyst mark graban is one of the best analytical systems thinkers that I know with degrees in industrial engineering and business, and has written several influential books about how to create cultures of problem solving and innovation, including measures of success, react less, lead better, improve more, and the mistakes that make us, cultivating a culture of learning and innovation. Mark is also a consultant, speaker and prolific podcaster and thought leader in the spaces of lean quality and operational excellence. Mark just celebrated 500 episodes of his lean blog interviews podcast and I was excited to learn that I was one of the top five guests with the most appearances. Mark and I have been friends and colleagues for over a decade and a half and he is an important link in my chain of learning.

Katie Anderson:
His insights have helped me become a more effective consultant and leader in how to guide other organizational leaders in understanding data and systems to create cultures of real improvement. And I know you’ll benefit from his insights here as well. We started off our conversation with what mark believes are some of the defining characteristics of being an analytical systems thinker and driving change, better decision making and making real improvements in organizations. Let’s dive in.

Katie Anderson:
Welcome to Chain of Learning, Mark.

Mark Graban:
Katie, it’s great to be here, and like you said, it’s been so nice interviewing you, having conversations with you so many times. It’s nice to be here on your podcast.

Katie Anderson:
I always learn something from you and I’m really excited to dive into this topic of how to be an analytical systems thinker and how that’s so critical for really able to drive transformational change and create cultures of continuous improvement. There’s so many things we could talk about here on the podcast, and we have on many different podcasts on yours and other interviews on my former podcast as well. I’m really wanting to dive into what are some of the defining characteristics that you see about being an effective analytical systems thinker and how that is important for driving change in organizations.

Mark Graban:
That’s a great question, and I think one way of looking at it is kind of thinking about another question, are we driving change or are we driving improvement? All improvement is a change. Not all change leads to improved performance in different dimensions. So I think what’s so important for any transformational change leader is not just being analytical, but applying the right kind of analytics. I think one thing I’ve discovered over time is not all data driven decisions are good decisions, and as much as different companies in the last 1020 years have sort of glorified data driven decision making, well, we got to think about not only is the data good, but is our decision making statistically valid. So I think the two key things, whether it’s an executive or a coach, I’m in that role of coach is making better decisions about, first off, monitoring ongoing performance metrics, and then secondly, evaluating an attempted improvement or an experiment, or a project, or a kaizen event or an a three, regardless of how we’re framing that, have we really moved the needle in the right direction and in a statistically meaningful way?

Katie Anderson:
Such an important distinction that you just called out and highlighted, mark, you know, not all data and information actually drives to good change or the right change. We first need to know directionally, you know, where do we need to be going, what does better look like, what are we trying to get to? And then are we using information to move us there? So I like how you framed it. It’s actually, how do we use an analytical mindset to actually inform better decision-making, not just doing, doing and thinking we’re going to get there. That’s so powerful. One of the challenges I see is a lot of times we come in as operational excellence consultants or coaches and get really focused on the silos or improving a small section of a process and not necessarily looking at the totality of the system. How have you found looking at data informations, or even going to see been really helpful in shaping an understanding for real system change towards a direction that’s needed?

Mark Graban:
Yeah, I mean, I think there’s influences and contributions from lean methodology. So for one, the process of value stream mapping, and I’m specifically emphasizing the process of creating the map, not the map itself as the product. I think the real benefit comes from the cross-functional team getting together in the room and everybody understanding how their department fits into the value stream. And now you can start talking about interconnections that might be linear flow or not. It could be a more complicated system where there’s these different dynamics and try to help people understand how to avoid the situation where, like, I’ve improved my department, but I’ve just pushed the waste upstream or downstream. And, you know, I think looking at systems that way through a lean lens is really helpful. And then there’s a whole literature out there, a lot that people could read or go and study in what’s called system dynamics. You know, as taught at mit, there’s a lot of free material out there and courses and reading.

Mark Graban:
The one book that comes to mind is peter senge, his book the fifth discipline. And then, you know, looking at systems and then connecting to measurement, you could look at the deming literature and one of his, you know, both talk about the chain of learning Katie, don wheeler both learned from doctor deming and taught doctor deming some things when doctor deming was alive. So don wheeler’s book, understanding variation, certainly very influential on me and on the book measures of success. You know, I cite him repeatedly, and he was kind enough to write the foreword for that book.

Katie Anderson:
Let’s explore measures of success. The book you wrote based on what you’ve learned from deming and don wheeler and others in your own application has been so helpful for me as the book I give to executives and leaders and consultants about how to really understand data well and not be responding to noise. I do a little dance of joy when I see the process behavior charts in the executive report outs on the nonprofit board that I’m on because it informs such better decision making. So let’s explore that. So what was the problem you’re trying to solve for leaders and continuous improvement folks, when you wrote this book?

Mark Graban:
So one of the uphill challenges here, and I guess in my career, I take on uphill challenges. You know, we do these things not because they are easy, but because they are hard. There’s a lot of, if you will, data-driven decision-making that isn’t good decision-making. And I think one example of that is overreacting, to, quote unquote, noise in a performance measure over time. And I think one of the things that’s just tough to have good intuition about is I think the reality is the same process in different hours, different days, et cetera, will generate variable results. I think we like to think of the world as very deterministic. If we have a good process, it will always generate these right results. There’s always going to be variation.

Mark Graban:
It’s a matter of how much. So a really well-defined, tightly controlled process might have a small amount of variation. Some processes have a lot of variations. So the trap people fall into is reacting to every data point. This data point is worse than a month before. We’ve got to have a meeting about it. And people talk about, well, what’s the root cause of why things got worse? And people, I mean, if they’re being honest about it, they would probably say, I don’t know, because nothing really changed. It’s just noise.

Mark Graban:
But there’s that pressure of like, well, go do something, and then you can go and pretend to do something. And variation doesn’t mean the metric always goes up, down, up, down, up, down. But generally, if you weight a couple of data points, things will recover, and then you can take credit. And that’s not a good reflection of reality. And we want to better understand cause and effect relationships between what we’re doing or not doing and what happens to our performance metrics. So trying to explain every single data point is kind of a waste of time explaining every up and down or even some rules of thumb that sometimes get taught in lean circles. I think people say, well, okay, we don’t want to overreact to one data point. So there’s a rule of thumb, if it’s red two months in a row, you have to do an a three.

Mark Graban:
And that could just as well be noise. The difference between red and green for one or two or even three data points. So the subtitle of the book, measures of success, is trying to kind of summarize the approach in six words. React less. Okay, well, so how, what do we react to? And there’s ways of determining that. If we react less, we can lead better, we can improve more if we’re not wasting so much time just chasing the noise, explaining the noise, we can focus on statistical signals or real shifts in performance, whether good or bad, to help make sure we understand and learn about, again, the cause and effect of what we’re trying to do.

Katie Anderson:
And I am going to point out that Mark is using his mug. Thank you for the mistakes that make us mug.

Mark Graban:
Thank you for using it. Katie.

Katie Anderson:
This construct is so powerful. You mentioned a lot of times the sort of technical aspect of problem-solving that we’re taught as lean consultants or operational excellence, lean six sigma black belts, is to follow the trend line. But not knowing those, like, behavior boundaries is so, you know, I didn’t even realize that I was doing those things. You know, if I look back at some mistakes, as in my earlier career, what do you recommend for lean consultants or executives who are really wanting to understand data better and not be so reactive to all these, like, what do you said, the noise in the system.

Mark Graban:
So I think the, the countermeasure to that is something called the process behavior chart. That’s don wheeler’s term. A process behavior chart is a very specific type of, you could call it a control chart or statistical process control spc chart. And using that process behavior chart. So for one, you know, it’s drawing line charts. You don’t want to see just two data points. Or here we are, it’s april 1. As we’re recording this, if we’re a lot of organizations, if they start the year with a blank chart, they can now see a january data point and a february data point, the march data points not tabulated here yet, we should really be looking at the 2023 numbers, if not back in the 2022, because the beginning of 2024 is probably the continuation of 2020 three’s system.

Mark Graban:
So part of it is looking at more data points. There’s a whole chapter in measures of success titled linear trend lines and other cautionary tales. Linear trend lines in excel can be mathematically correct but practically misleading. So if we’re trying to show what we did, something we hope it was driving improvement, we can draw a linear trend line that shows, well, look, it’s moving upward that proves that we’ve improved. Now, there’s an assumption then, well, is it going to keep going up? Maybe not. Probably not. And the problem with linear trend lines is that they are very, very sensitive to the first data point and the last data points. So if you give me any set of data, probably 20 data points or more, I could cherry pick, like, well, we’re going to start the chart in april 2022 instead of august 22, because now, mathematically, it shows an upward linear trend.

Mark Graban:
When I think what really happens more often with performance metrics, even if we’re aiming for continuous improvement, is that you tend to see step function improvement. Now, there might be a lot of step functions, but a metric tends to fluctuate around a flat average and then maybe takes a jump upward when we’ve improved the system. And so that process behavior chart methodology, it’s going to be hard for us to. It’s such a visual method. To talk about it in this format would be tough, but it starts giving some really mathematically valid basis for deciding, okay, when we implemented a change, did we just create a slightly above-average data point, or have we really created an outlier in a positive direction that says, wow, it’s no longer just fluctuating. You’ve really changed performance in a meaningful way. It takes one or more data points to determine that.

Katie Anderson:
And yes, talking about data points in an audio format’s really hard to see, but I highly recommend people check out measures of success. I literally hand it out to people when I’m working with them because Mark walks through how to set these up so well, and it breaks it down in a really easy way that’s accessible and you really see the impact. Stop reacting to the noise and go check out Mark’s book and really start bringing that into your organization about how you have these process behavior charts and really understand data. Because there’s a risk, right, if we keep responding to that noise. Mark, like, what have you seen happen in organizations if lean consultants or their executives continue to just be in this reactive state.

Mark Graban:
A lot of it clouds our understanding of cause and effect. So there’s a risk of declaring victory too soon. One or two data points, post-implementation or initial implementation. We say performance is better and we celebrate, and then it may be, you know, we haven’t really impacted the system, and now it starts fluctuating, kind of now in a bad direction. And people might draw a false conclusion of, well, our changes were working, but now we’re back. Like, that might not be true either. I think that just leads to all sorts of unhelpful conclusions. Are we rewarding and promoting people based on some random fluctuation? Are we punishing, we shouldn’t be punishing people for trying to improve, but are we drawing the wrong conclusions about which leaders are doing well? Who are we promoting? Who are we moving ahead? Which projects are deemed successful? So I think there’s also a risk of doing a small test of change.

Mark Graban:
Okay, we’re gonna do some improvement that we think improves patient flow. In one unit, we draw the wrong conclusion from the data in that small test of change, and now we roll it out everywhere. That could be a huge waste of time and resources.

Katie Anderson:
Yeah, it’s like we make assumptions that we’ve come up with this great solution across the system, and then we’ve basically just made it much more complex and really frustrating the people doing the work as well. I’ve also found something we talked about before is the amount of time that’s wasted in executive meetings, talking about things that are actually not problems. And so if we could get really focused on those, really even understanding what the real problems are, we’re going to be then leveraging all the creative thinking and energy in the organization to the right. Real problems.

Mark Graban:
Yeah. And what I would want to see in a metrics review is management by exception. And I think there’s two exceptions. So one is a data point that’s a statistical signal, whether it’s in the good direction or the bad direction, that is absolutely worth reacting to. So, again, back to the subtitle of the book, I’m not saying never react. It’s just react less react to the right things. When we react to everything, we lose focus and waste time on the things that we should be reacting to. So we can look for that statistical outlier in a process behavior chart.

Mark Graban:
And then the second thing we can look at is now there’s this question of, is our performance meeting target consistently or not? So we have to be a little careful, like with the green red interface. You know, if a metric is continually in the red. Well then yes, we need to improve that system to get performance to be better. But that doesn’t mean reacting to the last data point. We need to step back and look at the system. The system, over time is generally producing results that are not where we need them to be. And hopefully the goals for those performance measures are based on real, legitimate customer needs as opposed to being arbitrary targets. But I think the biggest trap is, again, like when we have a metric that tends to be moving a lot between green and red, that doesn’t mean the system has changed.

Mark Graban:
We might need to improve the system. So the metric is always green. But asking why did it go from green to red? The answer could be like, there is.

Katie Anderson:
No reason, it’s just normal fluctuating.

Mark Graban:
So go study the system, be an analytical systems thinker and improve the system instead of just reacting. So it’s a different question of like, instead of asking why were we read the last two months, we might frame a different problem statement around why is there a gap between this range of performance that we’re seeing? Performance is ranging between 75 and 85%. We want it to be 95%. We’re explaining that gap differently than saying that month was 77. So the gap is the difference between 77 and 95. We really need to look at that range of performance. And again, that built in variation that’s there, whether we like it or not, the variation is there. The process behavior chart is telling us.

Katie Anderson:
That being able to frame problems, as you just said, really effectively is one of the important skills for being a real transformational change leader for good, right? Because to make sure that we’re even like looking at the right things to understand cause and effect and then once we have, then how are we problem solving and experimenting to understand if we’re closing the gap? And this leads me to the second part of our conversation I wanted to focus on about how to create a culture of real experimentation where mistakes and failures along the way have to be accepted as part of the problem-solving process.

Katie Anderson:
And you’ve written a great book, ‘the mistakes that make us’, based on your podcast and interviews with hundreds of people about mistakes, what have you learned, Mark about the importance of mistakes and failures in really being able to create a culture of learning and problem-solving.

Mark Graban:
In the last couple of years, between the podcast interviews, including the episode with yourself and mister yoshino, an episode with david meyer, who is also former toyota but usually based, originally not japan-based, keith ingalls, who works for a toyota subsidiary and still works there, you hear this pattern of culture, of reacting to mistakes in a constructive way. So for all of the focus on mistake proofing, especially with process mistakes, we want to put things in place that prevent process mistakes. When we discover a mistake because of circumstances we hadn’t anticipated before, therefore, we weren’t mistake proofing against it. In the case of mister yoshino and david meyer, their stories were different departments, but basically about loading the wrong chemical into a machine. And the reaction was so consistent, leaders pointing to the process and the system, and instead of blaming the person who loaded the wrong material, looking at the system and how the system failed that person and the company, I think when we look at process mistakes, like medication errors, surgical errors, processes in manufacturing, putting bolts onto door plugs of airplanes, there are certain mistakes that we need to be trying really hard to prevent. But when they happen, we need to react constructively and go into problem-solving mode. And then there’s a second category to me of mistakes that we could call innovation mistakes. We’re trying to create something new.

Mark Graban:
We are trying to improve our process. Those are the mistakes that we really have to expect and maybe even invite and realize. In the process of scientific, structured problem-solving, we’re going to form a hypothesis. We’re going to test that hypothesis. Sometimes we don’t get the results we predicted, but that should be a moment for learning now, instead of a moment for punishment, or forcing people to kind of rationalize or torture the data until it gives the answer that you want. I think that we can categorize the mistakes that we’re working to prevent, the mistakes that we’re kind of expecting. But either way, the reaction from leaders should be to think of karen ross for a minute, a kind reaction that’s helpful and constructive and focused on learning and future prevention. Or in the case of innovation, mistakes.

Mark Graban:
Sorry, one other point. Focus on iteration. We tried something. Let’s iterate and go try something new.

Katie Anderson:
That’s a really helpful distinction. Mark the sort of system-level process mistakes or failure points, which of course we never want to happen. But how do we look at it a system way? Instead of blaming an individual, what’s the process that led to the mistake? And then we can fix the process and then the innovation. That’s where we have to have that baked-in innovation experimentation mindset and it seems to me that if we don’t, if we’re not good at that first one, we’re never going to have innovation. So if, like, we blame people in our environment for any system failures, process mistakes, and we look, blame the people then we’re never going to be able to actually get ahead and have a culture of innovation because failing is not acceptable. So we can’t have that. How do you see that connection between response to process mistakes and how that links to creating a culture of innovation?

Mark Graban:
So the way leaders react to mistakes or problems or failures is really the key thing. What I’ve learned from people who are really the researchers and the experts in psychological safety have helped me understand, I think the connections when leaders react in ways that reward people for speaking up, and that includes pointing out problems, admitting mistakes, trying something, saying candidly, we tried that and it didn’t quite work. Like when those employee actions are rewarded, and I don’t mean pull out $20 or a starbucks gift card, but when it’s not punished. But I think the word rewarded is important because it’s not just tolerating, it’s really like rewarding. Thanking people, being encouraging, being a coach, thanking people for speaking up instead of punishing or marginalizing them. So I think you can see connections, both articulated specifically in the toyota literature. And I think you just see evidence of relatively high levels of psychological safety make, quote unquote, make it safe for people to pull the and on cord or to speak up in different ways. We can’t solve problems that we don’t know about.

Mark Graban:
Right. So you need psychological safety to be able to point out problems. Then you need good problem solving to make it worthwhile for people to speak up. And then you start getting toward that culture of continuous improvement. And I think one of the most common underlying failure modes. If people say, we’re struggling with lean or continuous improvement culture never took here. I hate to say lack of something is the problem statement, but I think really it’s a lack of psychological safety. Or we could frame it the other way.

Mark Graban:
People are choosing to not speak up. Then we could do all kinds of fishbone causal analysis of why are they not speaking up. The two main reasons usually are fear or futility. People will learn to protect themselves if they’re being punished, like you said, they’re going to stop trying to do innovative things, they’re going to stop pointing out problems, they would stop pulling the andon cord. But then if they’re speaking up and getting like a nice reaction, and again, shout out to karen ross, a nice reaction would say, Katie, don’t feel bad. We know it’s not your fault. We’re not going to punish you. Okay, now life goes on.

Mark Graban:
At some point you would stop pointing out the problem. If it never gets fixed. That’s the futility factor. So we need to avoid both. And I think you look at evidence of toyota, they have, I think, really eliminated, generally speaking, the fear factor and the futility factor.

Katie Anderson:
I want to go back to that comment that you made about thanking people for making mistakes. And mister yoshino, the subject of my book, learning to lead, leading to learn, has this incredible story about how in his first weeks at toyota as a young college graduate, he made a huge mistake that required 100 cars to have to be repainted and not only did he not get blamed, which he was worried about, his manager said, thank you for making this mistake because it showed that we hadn’t set up the working conditions for success. And like, wow, so incredible. You can go to Mark’s podcast, my favorite mistake to hear mister yoshino talk about that story. And we’ll put the links in the show notes, what a powerful difference. And then that same concept that toyota and others about what you said pull the and on, which is, and on’s a japanese word that means signal. But it’s incredible. When I go to, when I’ve gone to the toyota plants in japan, the number of times people on the line are pulling the cord, or actually, it’s not a cord anymore, it’s pushing a light, saying something’s going wrong in the process. I can’t do this. And then managers respond and so it’s not just feeling free that you can speak up, but it’s also the management’s response, the leader’s response to that. And how do we then problem solve from there? So those are such, so critical.

Mark Graban:
And that’s true. Also, I’ve been able to tour the plants in san antonio and georgetown, kentucky. The chimes are almost constantly sounding. The andon cords are being pulled so frequently that to me is the evidence of psychological safety. Now, like, I’ll also cite the book toyota culture by jeff leicher and mike hoseas has stories of he scratched a car and, you know, he was terrified that he was going to get in trouble, and they applauded and thanked him and reacted constructively. So that book is the only one I’ve seen in the literature that directly uses the phrase psychological safety a number of times. But I think that psychological safety is part of the water in the toyota fishbowl that people sort of take for granted and they don’t think to point out to others.

Katie Anderson:
It’s not always obvious the things in our culture that actually create the results and outcomes. So many companies around the world are trying to emulate what toyota’s done or use lean principles, but it’s around the attitude towards learning. As I talk about in my book, what mister yoshino says, learning, which is accepting mistakes and how do we respond to problems and then looking forward to how we’re going to continuously improve. I want to point out too, this is not just a japanese thing, right? You were just sharing an example. Like, we can do it in the west, in the us as well. And the numi joint venture between general motors and toyota is such an incredible example of gm’s worst performing plant, where there was actual, like intentional bad things, sabotage happening. And then when they had the partnership with toyota in the, you know, the year of that partnership went to being one of the best performing. And it was about creating this concept of what we now call psychological safety and how leaders responded to and on I talk about this in my book because mister yoshino was actually one of the ones who was leading the training program for these americans who’d had this terrible experience and how to really then have a different experience. And he cited that the number one thing was demonstrating that leaders response to problems and mistakes is what changed the entire culture and experience for those former gm workers. So we can do it too. So this is not just the japanese thing, but challenge yourself, what’s your response to problems or a mistake that comes forward? Are you like, and then act on it, or do you have that? Of course we’re all frustrated when something happens, but then how do we respond? In truly a kind way, looking at process, not blaming people and seeking to understand.

Mark Graban:
Yeah, and I want to give a shout out to my wife here, because she actually, one of her contributions, a comment she made that I incorporated into the book, is that when the impact of a mistake is serious, she’s not in healthcare, she’s in a manufacturing business. But it’s a manufacturing business where the quality of the product has a real human safety impact. She pointed out, when something goes wrong or when there’s a mistake, you can acknowledge the impact. And to me, that’s being kind, that’s being respectful. You can say, okay, well, this has had a serious impact on our customer, or it’s created a real risk. I think you can acknowledge that that’s different than being nice, of keeping people protected from that. It’s not like taking a dog and sticking their nose in their poop if they’ve pooped inside the house. It’s not that at all.

Mark Graban:
It’s just treating people respectfully and saying, well, here’s the impact of the mistake. Here’s why it’s so important we focus now on learning and prevention. That’s how she leads. That’s how the company she’s at is leading from the ceo on down. So I think, you know, just to reemphasize, as karen ross illustrates so beautifully, the difference between nice and kind, and you can do it at other types of companies.

Katie Anderson:
Right? And being able to talk about that reasons why with kindness and the consequences of that. And then now let’s have this be a learning moment, both to make sure this never happens again, and also understanding. Maybe you didn’t have the environment that was set up, the skills that you needed or the training or the support. So whatever that’s needed to help you be successful in the future. And that’s really the leader and manager’s role to do that. And if we all collectively do that, then we’re going to be able to succeed.

Mark Graban:
Yeah. And let me just share one other thing. I’m not trying to pick on you because I catch myself with the same language around saying mister yoshino made a mistake, as opposed to, like some in, let’s say, the patient safety movement or other aspects of quality or safety improvement would say mister yoshino was involved in, in a mistake. He played a part, but it’s not so simple to say he made the mistake. The system set him up to fail, as you were saying.

Katie Anderson:
So, well, that’s a really powerful reframing as well. And think about how our language actually influences even a potential element of blame culture without even intending it. Thanks for highlighting that. I mean, I know mister yoshino says he made a mistake, but that’s an interesting reframe too, about what is it that the system owns versus an individual intentionally being that one that comes out there. Well, even though it’s not all about japan, the only place that has this mistake, innovation, culture, it comes from toyota japan. Going to japan to learn about the history of a kaizen culture and where the roots of toyota’s excellence came from is so powerful. I am thrilled, mark, that you are joining me on my japan study trip this year. And I wanted to talk to you about this because you have gone to japan, what, four other on four other study trips.

Mark Graban:
I went five times between 2012 and the end of 2019.

Katie Anderson:
Wow. That’s a huge investment in your own learning. I guess my question is, what is the benefit that you’ve experienced for going to japan on these executive learning trips?

Mark Graban:
Well, on the first trip, it’s funny. That was my first time ever to japan and you learn some things, but it’s a blur. There’s just so much that’s different, so much that’s exciting, so much that’s going on. Having capable guides like you and your team and others who I’ve gone with before, certainly make that easier to navigate. Japan’s not impossible to navigate as an english speaker on your own generally. But I think the key thing I learned in that first trip, and learned in different ways in follow up trips. If anyone has ever said, oh, lean would be easier if we were japanese, I think a trip to japan actually dispels that assumption or that myth that toyota and companies like them that are either using tps or tqm to create a great culture and great results. That is not the default for japanese companies.

Mark Graban:
And I think it’s interesting, and we can explore this a little bit more of maybe some of the generalized japanese societal culture elements that are a net contributor to, quote unquote, lean practice. But then there seem to be some things that kind of hold companies back. The idea of, what’s the expression, the tall blade of grass gets mowed of thinking of like a hierarchical kind of conformity culture. My theory about the and on cord is that maybe it’s, one, the factory noise, but two, maybe it’s easier to reach up and pull a cord than it is to speak up verbally if they’re trying to build habits. So I think the one takeaway is, I have so much more respect for toyota. They have created and cultivated this culture over time. I don’t think it was easy for them just because they were japanese. So I think that’s one.

Mark Graban:
Is that the most? So then how do we take that home? Hopefully there’s inspiration. Either the idea we can’t do this because we’re not japanese, I think that’s been disproven. Or, oh, it would be easier if we were japanese. I think that’s probably not true either.

Katie Anderson:
Yes, all of the above. And just for our listeners who don’t know what the acronyms tps is, toyota production system and tqm is total quality management. And the concept of total quality management is actually really what influenced a lot of the principles of the toyota production system. When deming came to japan the 1950s and really taught them how to rebuild out of the world war two. I mean, they came from a real place of needing to innovate and do something different, a real, real fire underneath their. Underneath their feet. And it’s incredible, not just what toyota was able to do, but so many japanese companies because they had a real need. And as you said, it was really striking to me when I moved to japan a decade ago to realize that not all of japan is this, like, incredible, high functioning place.

Katie Anderson:
There’s some definite cultural influences that have helped elements of the toyota production system, or what we call lean and operational excellence. But there’s some things that are inhibitors too, as you pointed out, a lot of hierarchy waiting for the boss to make the decision. Fear of speaking up or needing to stay within the box of conformity. So if innovation can be really hard, and that’s actually something a lot of companies in japan are struggling with right now, how do we have more out of the box thinking, rather than just following what’s happened in the past as well?

Mark Graban:
Yeah. And the other thing I would say about tqm, I think tqm was a fad in the us in the 1980s. I’ve got a book on my shelf. It was titled why tqm failed and what you could do about it. I swear, you could republish that book by doing search, find replacement tqm with lean. The factors of why can it be hard to change? Or, you know, the quote unquote failure modes, where something like this runs the risk of being a trend, a fad in the us, where in japan, I’ve visited companies that have been really diligently using tqm in a very disciplined way for 30 plus years. But then they’ve learned some of them, like, well, doing these quality circles and these big, slow team projects. Sometimes that’s not enough.

Mark Graban:
So how do we get people more involved in what we might call a daily kaizen practice of plan? Do study, adjust on a small scale, see a problem, don’t form a committee. There’s a time and a place for that. But go try an experiment, evaluate if it’s working or not, adjust or move on accordingly. So seeing those different layers of improvement practices coexisting in companies is really interesting to see, too.

Katie Anderson:
One of the things I intentionally do on my japan study trips is have different companies and different industries we visit, because you can see how they’re applying these concepts. Maybe they’ve been practicing for ten years, which is a little bit more tangible for us. It’s not such a big gap as toyota. It’s like going on hundred years of deep, deep practice and knowledge, or maybe not quite 100 years, but what’s a little bit closer and then what the success is and what are some challenges they’re experiencing. So it makes it more real as well. I’m curious, so what are you most excited about? About coming to japan specifically with me this year, and not just for enriching your learning, but the whole experience.

Mark Graban:
So for one, I mean, I just love being in japan. Like, every time I’ve gone on a study tour, I’ve been able to tack on three to five days for my own exploration and visits. And so I’m just dying to get back. I was there right before the pandemic, you know, december 2019. So I love the environment, the culture, the food, just experiencing everything that’s different and special about japan. I’m really excited to go and learn more from your insights and what you’ve seen and connections you’ve made in japan and then to spend more time with mister yoshino. It’s funny, my very first trip in 2012 that was run by a different organization. They had mister yoshino as a guest lecturer.

Mark Graban:
He taught at, I think, for about 90 minutes about his reflections on tps. I still have the printout of the slides that I know I’ve shared with you, Katie. So just more opportunities to learn from him and the cohort. It seems like you put together a great cohort where we’re learning from each other. I’ve heard a lot of people who have gone on previous versions of your trips, and I’ve heard such positive things. So I’m gonna go with you.

Katie Anderson:
I’m excited to have you be one of an amazing part of the cohort. The conversations and learning that happens from the international leaders who come on this trip is always exciting for me because that’s what keeps it different as well. I learn from, you know, this is truly the chain of learning where we all learn from each other’s experiences and, you know. You met mister yoshino before I did. I didn’t meet him until 2014, of course, then he’s become one of the most important adult relationships in my life. And I’m so happy. His health as well. And he, you know, he joins us not only for a lecture, but like, on the bus, going to different site visits, enjoying meals together.

Katie Anderson:
And so that casual conversation with this 40 year toyota leader is just so. I’m so excited to be able to offer that to you and to others as well. I’ll bring it back together. Mark, we’ve talked so much about how you can use data to better inform system level decisions, stop being so reactive, and then creating an environment that embraces learning from mistakes as that accelerant to innovation. What’s your best piece of advice for other continuous improvement? Change leaders about how they can more effectively help lead the system level change and really influence the executives to be making better decisions and creating this culture of innovation and problem solving.

Mark Graban:
The one word, and thank you for helping me reflect on some of this here. I think the one word that ties it all together is candor. How do we cultivate an environment where people can be candid? Right? And candor is different than honesty. Candor means speaking frankly and sincerely about problems, about progress, about our experiments. When that candor gets punished, people learn to be quiet. They learn to hide problems. None of that leads to operational excellence and a great culture. So try to think of what we’re doing as a leader.

Mark Graban:
Are you modeling candor? Are you encouraging candor? And then, most importantly, are you rewarding it? When people are candid in different ways, I think that’s really the key.

Katie Anderson:
What’s the best way for people to get in touch with you if they want to get your books or reach out to connect?

Mark Graban:
My website, markgraven.Com or I can be found on linkedin. My name’s unique enough even if you misspell it, you’ll probably find me if you google it.

Katie Anderson:
Markgraven.Com dot so powerful, Mark. So candor. Lead with candor, and lead with kindness and intention. Thanks for being on chain of learning here today, Mark, and I am so thrilled to have you joining me in japan. I can’t wait to talk more about that after the trip as well, so thank you.

Mark Graban:
Yeah, thanks, Katie.

Katie Anderson:
Becoming an effective analytical systems thinker, seeing the big picture and connecting the dots of across your organization. Using data to inform better decision-making and taking a systematic scientific approach to problem-solving is one of the most important competencies for you to master. If you want to be an effective leader, continuous improvement change agent or consultant. It’s how you can ensure that you and your organization are focusing on the right problems and real problems, not just reacting to noise in the system. Understanding the causes to these problems and looking across the system to ensure that your fixes are not generating more problems upstream and downstream and across the system, and creating an environment where experimentation and learning from failures is part of the process for generating solutions and leading to greater success. It’s how you will create a real culture of improvement, not just lead, change and change initiatives that don’t necessarily result in better processes or outcomes. If you want help in better understanding how to use data to inform decision-making, I recommend getting a copy of Mark’s book, measures of success. It will help you and your organization to learn how to create and use process behavior charts. I’ve given this book out to so many leaders, and it has really changed the focus of our meetings, from talking about the noise and the blips and the metrics to focusing our discussions on the real problems and thinking about how we can close the gap and improve. And if you’d like to hear more about learning from mistakes and to hear the big mistakes story that I talked about here that mister yoshino was part of, be sure to check out the episode of my favorite mistake podcast that mister yoshino and I were on, and also check out Mark’s book, the mistakes that make us. I’ll put the links to both the podcast episode and the book in the episode’s full show notes. And of course, if you’re ready to invest in your leadership impact and to understand more of the nuances about what it really takes to create a culture of continuous improvement, I’d love to host you in japan just like Mark. Learn more about my executive japan study trip program@kbjanderson.Com. Japantripe I encourage you too, to reflect on this episode and think about how are you using data to help you and your leaders make informed decisions? How are you using a scientific approach to problem-solving, ensuring that you’re defining real problems, understanding causes, and running experiments to find solutions? And how are you creating an environment where mistakes and failures are embraced as part of the learning and innovation process? If you haven’t yet downloaded my katalyst self assessment, go do so now. You can learn more about each of the eight competencies to help you be an effective transformational change leader, including being an analytical systems thinker. This will give you opportunity to reflect on your own skills and opportunities for growth. The links are in the show notes and you can go directly to kbjanderson.Com katalyst with a “k” katalyst and also go back to listen to episode nine of this podcast chain of learning to learn more about each of the competencies, be sure to follow or subscribe now to chain of learning and share this podcast with your friends and colleagues so we can all strengthen our chain of learning together. And if you’re enjoying the show, please be sure to rate and review it on your favorite podcast player. Thanks for being a link in my chain of learning today. I’ll see you next time.

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