I found this article this morning after doing some reading around Jason Calacanis’ post from Friday. 37signals “experiments” sound a lot like Semler, don’t they?
Tag Archives: semler
Agile / Lean or Common Sense and Permission To Change?
As anyone who reads this blog regularly knows, I’ve spent a lot of time over the last 3-4 years studying agile methodologies and most recently lean concepts and principles. I have most recently been reading a couple of books by Ricardo Semler, who runs his company in a completely democratic way – doing away with all top down authoritarian management principles and allowing the employees to make decisions on dress, salaries, where they work, when they work, and most importantly, how they work.
I remember when I had first read the book Agile Software Development with SCRUM by Ken Schwaber and Mike Beedle and I had sent an email to my manager with a link to the book and the small sentence fragment “common sense codified”. We began experimenting with Scrum within my group, but it was very difficult to get other groups on the same page. We wound up with a lot of sprints that ended when things left development and entered the “normal corporate process” to finish things up and get them to production. We also had a lot of conversations around whether what we were doing was “standard process”.
As I started reading books on TPS and Lean, the same thing occurred. It struck me how most of the things that are characterized by “lean” are just common sense principles explained in such a way that they sound like a “process” that manager types can “buy into”. But really, they work because they make sense – and people have the permission to standardize and then change their work rather than having things written down and subsequently treating these processes like they are set in stone. You can’t change them unless you go through an agonizing approval process up the management chain.
Over the years, I’ve read and listened to many podcasts talking about the same things going on in other companies. People struggle to be able to change the way they work because they have to get “management buy-in” to take action. So much wasted effort just to try something new.
Interestingly, once the “buy-in” occurs, over and over again people try to “implement Scrum” or “do XP”, mostly by the book, and do not throw out things that do not work for the group. For some reason, we all think we have to be a part of some “methodology” in order to be effective.
One of the most fascinating things about Semlers company is the explicit trust and ability to control ones own destiny that the employees of Semco seem to receive. I ran across a particular section of the book where he was talking about the process improvements that “just started happening” due to this culture change and I found some interesting similarities to lean that I thought would be interesting to highlight. He starts off with:
The factory committee spun off groups that studied the plants products and how the workers made them, looking for ways to save time and make improvements. These teams weren’t created by Semco; they formed spontaneously, as the bracing winds of democracy swept through the food service equipment unit, and often met after hours or during lunch.
Interesting, employees actually wanted to do a better job and self organized because they could.
He goes on, talking about some of the changes:
One group restructured the dishwasher assembly line, changing it from a sequential assembly process to a batch concept in which dishwashers are assembled in twos and threes by teams of workers that do many different tasks and spend the time between batches prefabricating the components they will soon need. They also came up with a system in which all the parts for the dishwashers were stocked in open racks in the middle of the factory. Metal tags, green on one side and red on the other, hung on each rack, and the workers would flip the tags when they saw it was time to reorder, ensuring a steady supply. This was a big improvement on the traditional assembly line, in which dehumanized workers have no role in decisions regarding the production process.
What we see here are people electing to move from an assembly line to, basically, work cells implementing small batches of inventory with workers that are skilled in multiple areas. They even set up a “Kanban” system, though I doubt they knew it, where they had visual cues of when parts needed to be supplied.
Note that not once in these paragraphs does he mention the word “lean”. There was no implementation of “lean”, no “lean” or “continuous improvement” initiatives. This just seemed to make sense to the people doing the work and since they were allowed to do it – and knew enough about the overall process rather than just their small piece of the overall process (i.e. they were multi-skilled), they were able to see the obvious and execute it without all of the red tape – and get great results for the company.
He goes on:
The strength of these groups was their diversity. They included factory workers, engineers, office clerks, sales reps and executives. They didn’t have a formal head; whoever showed the greatest capacity to lead got the job, calling meetings and moderating discussions. In more than one group, a shop-floor worker guided professionals. Instead of a seniority system, or boxes on an organizational chart that guaranteed power, the groups were held together by a natural system of collegial respect.
Again, you hear this a lot in TPS. People are trained from the bottom up in the company and have skills in multiple areas. While there are “leads” that are responsible for a product line, everyone has the ability to lead when they are the most skilled for the job at hand.
The only vague reference to lean that Semler makes in this passage is the following paragraph, where he draws similarities and differences between what Semco did and TPS (though Toyota is not explicitly stated):
There are similarities between this system and the Japanese approach to organizing manufacturing operations, but also important differences. In our groups, younger members didn’t automatically submit to their elders. Moreover, once a team decided an issue, it stayed decided. There was no approval needed to make a change. Then again, there were no special rewards for new ideas. It was a spontaneous process; people participated only if they wanted to.
As I read this it really got me thinking. In most of the
process agile / lean related books that I’ve read there seem to be a few common themes:
- Trust people to do the right thing for the company
- Give them freedom and authority to work the way they want to
- Push decisions down the chain as far as possible
- Work in small batches and change things that aren’t working
- Allow those who are capable of leading to lead, no matter what their title or position is
- Put quality checks in place – whether it be test-driven development, or quality checks at each step in an assembly
- Fix problems at the core and stop the line as quickly as possible – in development this would be TDD and automated builds. Once a problem is found, find the root cause and put a test or quality check in place to ensure it doesn’t happen again
- and finally, Trust people to do the right thing for the company
One more principle that I would add would be “tolerate mistakes”. Many of the issues that I’ve come across with other groups is that if they make a mistake they feel they will be punished. I’ve had great success with my team in articulating that I know mistakes will be made, but I want them to be made once, a lesson learned, and things put in place (usually automated) to ensure they won’t happen again. I’ve found that if people know it is expected that mistakes will be made, and everything doesn’t have to be perfect, they are more receptive to trying something new.
But I digress.
What Semler’s story shows me is that if people are given the freedom to work the way that is most effective, they will. More than that, if you invest in them with trust, they will want to do these things as their commitment to the company will obviously go up based on how they feel they are treated.
Semler uses a key phrase throughout his books that is repeated over and over. “Treat people like adults”. Semco, Toyota, Amazon and Google seem to do a really good job at this, as I’m sure most high functioning companies do. Read this article called The Google Way: Give Engineers Room and you will see the same concepts outlined in the excerpts on Semco that I have just written about. It seems to be a common theme.
So my real question. Is methodology and process really the answer, or is it deeper than that? Is it the way we treat employees that cause inefficiencies? If it is, if we took this base principal of trust and actually implemented it, would our employees come to the same conclusions as companies like Semco, Toyota and Google?
I think they would, because the principles and processes implemented by these companies are really just common sense without all of the complications of “process” and authoritarian management. They encourage workers to work outside their “box” and learn what they need to learn to be more effective. I would guess these employees feel valued, because they can constantly improve themselves rather than just “be the guy that puts the screw in the hole”. When you are allowed to improve yourself, your commitment rises to those who “allow” you to do so. What you wind up with is a highly efficient company that can change on a dime because people are allowed (and encouraged) to change and improve.
Most interestingly, the processes wind up looking “agile” or “lean”, without all the cruft of trying to follow a cook book.
Am I officially becoming a hippie, or does this line of thinking make sense? Let me know if I should go join a commune.