Problem-Solving at the Corporate Level 

For a second month, The Management Brief continued to explore problem-solving, especially as it occurs at the corporate level and the business impact it delivers. Josh  Howell, LEI President, and I got together with past colleagues (I worked with Olivier Larue while at TSSC, and Josh was with Scott Heydon at Starbucks) and a long-time lean ally and contributor to the lean community (Jim Lancaster), and we republished problem-solving wisdom from Jim Womack. Here’s some key learnings from each: 

The Toyota Triangle and Problem-Solving — Olivier Larue 

• TPS is an economic system for growth and a means to serve humankind. 
• The three pieces of the Toyota triangle — philosophical, technical, and managerial — are necessary for TPS to succeed. 
• Problems with problem-solving include solving the wrong problems and letting small problems grow to big problems. 

Show Respect by Exploring Problems with Your Workers — Jim Womack 

• Shared problem-solving shows respect for people. 
• Management and frontline associates need each other to solve problems. 
• Operational outcomes via shared problem-solving far exceed those of command-and-control management. 

Transforming as a Problem-Solver — Scott Heydon 

• Even at the leader level there is the need to see problems from the bottom up. 
• Lean thinking forces leaders to see work in a new way. 
• Advice for lean leaders: spend time where the work happens and ask questions about the work to help frontline associates become better problem-solvers (not solve problems for them). 

Learnings of a Lean Pioneer — Jim Lancaster 

• Learning how to learn and bring others along on the lean learning journey is necessary to accelerate growth. 
• You can’t problem-solve from the executive suite. 
• Deterioration of successes is inevitable — stuff changes — so you need a system to respond rapidly to deterioration and enable incremental improvements to accumulate. 
• Experiential learning forces individuals to learn from a failed change, deal with frustration, and approach the problem differently. 

The Toyota Triangle and Problem-Solving 

With Olivier Larue, President of Ydatum, we discussed the Toyota Production System (TPS), the three elements embedded within TPS that make it more than just a production system, and the ability of TPS to foster problem-solving and creativity. Olivier recently authored the first of three volumes of The Toyota Economic System, which will present the three elements of the “Toyota triangle” — philosophical, technical, and managerial — and their necessity in making TPS an economic system for growth. 

I worked with Olivier at the Toyota Supplier Support Center (TSSC) in the late 1990s, and, since then, he has led Ydatum and assisted companies in implementing its version of TPS. TPS allows companies to “build a product affordably and very much customized to the desires of the customer, one without compromising the other,” said Olivier. Many organizations have trouble achieving the primary goals of TPS — highest quality, lowest cost, and shortest lead time — and sustaining them long-term, he added. And that’s where the Toyota triangle comes in. 

The well-known TPS “house” (the roof consists of the three goals, supported by jidoka and just-in-time columns) embodies the three elements of the Toyota triangle. But they are not specifically called out in the house, especially aspects of human development, which is critical because only people can solve complex problems, human problems, according to Olivier: “TPS at the end of the day is trying to solve a human problem using people through the human creativity and the human intelligence. We cannot lose focus of that because if we lose focus of that … we may discover things but not exactly how to apply them or may be applying them wrongly.” 

He also discussed how the philosophical aspect of the triangle, the topic of his first book, drives businesses to achieve “true results and true benefits in totality, not just for the company to make a better profit or for the customer, but for the worker and society at large.” TPS helps companies go beyond a profit focus by moving away from the “quarter to quarter” approach that compromises long-term benefits for short-term results. His next book will focus on the key tools and the technical aspects of TPS, such as the relationship of jidoka and just-in-time and how they work as a system. The third book covers managerial — how to manage and mentor others and avoid problems that occur when there is an insufficient understanding of how to manage with TPS. 

His current book shares examples of kaizen activities and learning from failed problem-solving, and he talked about the organizational problems he encounters with problem-solving, such as people gravitating toward problems they know how to solve instead of solving the right problems. This occurs because it’s not always safe to solve the right problem, and individuals don’t have the courage to take them on. “It’s very important for companies to realize that if they don’t provide an environment where it’s safe to solve problems, two things are going to happen: problems are not going to get solved, or if some problem gets solved it will be the wrong ones… As management and leaders, you have to be able to encourage the people to solve difficult problems without fear of having negative consequences if they fail.”  

In addition to encouragement, it’s critical to build a problem-solving capability, adds Olivier. This requires a framework that talks to why (problems that are embedded into the mission of the organization, such as eliminating wastes) and the how (widely present, tacitly or explicitly, in leaders’ behaviors).  

Olivier notes that most companies don’t discover problems until they are big, and big problems are hard to solve. “We have to be able deploy the means by which problems are visible very early so we can tackle them when they are small. And we must also be able to understand a bit more clearly why the problem happened, and this is where things like standardized work are very important. When the work is done haphazardly, you don’t know what happened and it’s very difficult to investigate.” 

We discussed the role of the Toyota philosophy in furthering society and humankind, enabling corporate progress while doing good — e.g., not polluting the planet, ensuring dignity of work. “How do you create an environment where you reconcile the creative nature of people with mundane requirements of industrial work,” asks Olivier. Josh agreed that at the core of TPS/lean philosophy is all humankind: “Ownership who is so concerned about profits, the customer who has problems to solve and hopefully is leveraging your products and services in order to solve their problems, and then the people who are doing the value-creating work and overseeing that (the employees, the workers, the managers). Generosity is found in the philosophy of TPS, and also greediness. It’s greedy on behalf of all.” 

Show Respect by Exploring Problems with Your Workers 

We republished this 2007 article by Jim Womack, LEI Founder and Senior Advisor, which explores the dual benefits of a shared problem-solving workplace: operational outcomes that far exceed those found in command-and-control environments and mutual respect among frontline associates and management.  

Jim described the value that problem-solving brings to corporate culture: “Over time I’ve come to realize that this problem-solving process is actually the highest form of respect. The manager is saying to the employees that the manager can’t solve the problem alone, because the manager isn’t close enough to the problem to know the facts. He or she truly respects the employees’ knowledge and their dedication to finding the best answer. But the employees can’t solve the problem alone either because they are often too close to the problem to see its context and they may refrain from asking tough questions about their own work. Only by showing mutual respect — each for the other and for each other’s role — is it possible to solve problems, make work more satisfying, and move organizational performance to an ever higher level. 

Transforming as a Problem-Solver 

Scott Heydon, former VP of Global Strategy at Starbucks, McKinsey & Co. consultant, and a Senior Lean Coach with LEI since 2014, spoke with Josh and me about his efforts to transform Starbucks with lean thinking, learning lean methods and new ways of problem-solving along the way, and how he’s taken that knowledge to other organizations.  

Coming out of the Tuck School of Business at Dartmouth and then working with McKinsey, Scott had honed a top-down, MBA-style problem-solving that was focused on financials and strategic analysis. His time at McKinsey accelerated his knowledge of business and helped him develop a critical skill that he still relies on today: thinking about problems in a structured way and asking questions. Then at Starbucks, as he learned about lean strategy, he recognized a need to see problems from the bottom up and develop the capability of others to incrementally improve and problem-solve at the local level to “get better every day.” He then increasingly engaged leaders and others in not just what to achieve — the problem to solve — but how to do that and how to develop others’ problem-solving skills along the way. 

Since his time working on the line as a teenager at McDonald’s, Scott said he has always sought to create a good customer experience. That was enhanced at Starbucks when working with LEI coach Jeff Smith, who “forced me and taught me to see work in a new way.” He was able to see things he had failed to notice in the past, and it got him focused more on the work and teaching people more about the work. He evolved his programmatic approach as he gained a better understanding of the processes and problems that need to be solved specific to individual Starbucks stores, asking store leaders, “What problem are you trying to solve?” 

Scott offered advice for those in leadership positions progressing with their own lean learning and working to develop and support others who are learning with them. 

“Spend more time where the work happens,” he said. “That can be challenging as a leader because people will operate differently.” In a retail environment it can be difficult for leaders to go and see work, and do so without creating a dynamic that is not authentic (it becomes more of a production or show for the “big guy” who is coming in). Some stores will spend thousands of dollars prior to a leader visit, and he asks why those changes aren’t being routinely made for the benefit of customers rather than just for a leader to see. Josh noted it’s very different for a leader trying to get close to the work at hundreds of stores across a retail chain compared to manufacturing leaders who may have only a few facilities to periodically visit. 

Scott would get close to the Starbucks work by serving as a barista in a local store for a few hours each week, and told people on the line there he was trying to learn and was not there to judge. It also helped that he had an idea of what to look for and how to engage with people and draw out learning, traits he had learned from his LEI coach Jeff. He said to turn off the problem-solving in your brain as you talk to someone, and instead ask questions to learn from them about what they are doing and ask questions that can help them become a better problem-solver. “To develop that capability in others and to create improvement by supporting others is a really important capability for leaders.” 

He said it was difficult at times at Starbucks to get leaders engaged with frontline learning: some got it, some rejected it, and some accepted it but then left the company. It required “recognizing that not all challenges and opportunities can be pursed from corporate, and that you need to engage people.”  

Scott recalls a John Shook assertion that expecting teams to do problem-solving without equipping them to do problem-solving is actually disrespectful, “and that really hit home for me.” He has been trying to help leaders bridge the gap from saying that people are their most important assets to establishing the actions that support those words. Just as Scott has learned much about lean through experiences, such as site visits, he tries to establish those conditions for others. “Virtually all of my learning, 80-90%, has happened through experiences… Experiences can be really powerful. Often if I get more time I will ask people to go through experiences and try to get them to learn.” 

Learnings of a Lean Pioneer 

Josh and I completed our look at corporate-level problem-solving by talking with Jim Lancaster, Owner and CEO of Lantech. Jim is a lean pioneer and has been on a decades-long lean journey. The lean transformation of his packaging-solutions company was highlighted in Jim Womack’s and Daniel Jones’ 1996 book Lean Thinking, and the company has steadily improved, growing the business 75% since 2020 despite economic and market factors that have derailed other companies.  

Jim, author of The Work of Management, started at Lantech in high school when his father, Pat, was CEO. After college he worked in the financial industry, and then came back to Louisville to help run the family business in the early 1990s. “I grew up in the sales side of our business for the first four or five years before taking over and running the company in 1995, which is when I really started leading the charge on lean as opposed to just participating in the workshops,” said Jim. “I’ve been around [lean] since the early 90s, for a really long time through its various terms and various epics. The core principles have not changed, and the value has not changed.” 

It was important and occasionally difficult to get others at Lantech as passionate about lean as he was. “Learning how to learn and bring others along the learning journey with you is a really important thing,” he said. “If you don’t have an army that you’re building as you’re going, you can only go at your own speed.” Early in Lantech’s lean transformation he knew how every process worked, more so than today, and he has come to realize he needs to have a process to get down to the problem when the organization is unable to solve a given problem. “You just can’t manage it from a third-floor conference room, and you certainly can’t problem-solve from the third-floor conference room.” 

He recalls at one time teaching at and working on improvements to a specific production line, only to return after a trip and find that gains had deteriorated significantly. He was “despondent and frustrated,” but realized that deterioration is inevitable and that “stuff changes, stuff happens” and the system must be able to respond rapidly when deterioration does occur. “That understanding, in a visceral way, was huge for me.” He saw the need to accumulate incremental improvements and prevent successes from deteriorating so that each “chunk” of improvement adds to what has already been accomplished — unlike the traditional American view of getting the next big win. “The way I’ve been successful is by accumulating incremental benefits and then learning how to not let those deteriorate so when I add the next chunk it actually accumulates.”  

His book describes the principle of what an organization needs to accumulate benefits and the Lantech management system and key components that make that happen:  

• Escalation process for problems that cannot be resolved immediately,  
• Metrics in all areas for quality, cost, delivery, and safety that establish a 90-day rolling average against which each day is compared and triggers problem-solving if outcomes are lower than the average (hence, the average repeatedly gets better), and 
• Process improvements not driven by metrics using tools of A3s and key task monitoring (KTM) to leverage opportunities and solve problems that often involve many functions. 

Jim, like Scott earlier in the month, praised the power of experiential learning, especially as changes fail and individuals “stub their toe” and cope with difficulties. When that happens, leaders need to patiently let them face their frustrations and work to “see the problem differently.” Individuals need experiential learning to push their thinking and push creativity for different approaches. “This is about belief change.” Only through a process of failing and learning do beliefs begin to change.  

Jim discussed the “power” of having the confidence to make change yourself, of teaching others to do the same, and of knowing how to make stuff happen. “There’s a lot of people out there who know how to change data, make PowerPoint slides, tell convincing stories, and do motivational speeches…There aren’t that many people that know how to drive real change. There aren’t that many people that know how to really take real waste out. There aren’t that many people that can teach how to do that… If you get the opportunity to be around a mentor that can teach you how to do this, do not waste that opportunity.” 

As a mentor today, Jim enjoys watching the next generation of people who get it. “When they actually get it and you see them stand up and lead with those principles, it’s really, really fun.” He’s also excited for his children that are starting to work at Lantech and for them to learn the lean principles that have taken his family and the company so far. 

The Management Brief is a weekly newsletter from the Lean Enterprise Institute that bridges the gap between theory and practice in lean management. Designed for leaders focused on long-term success, it delivers actionable insights, expert perspectives, and stories from real-world practitioners. Each edition explores the principles of lean management—strategy deployment (hoshin kanri), operational stability and continuous improvement (daily management), and problem-solving (A3)—while highlighting the critical role of leadership. Subscribe to join a growing community of leaders dedicated to creating organizations built for sustained excellence.