The lean machine. How Harley-Davidson drove top-line growth and profitability with revolutionary lean product development by Dantar P. Oosterwal. In SAFe you can find several references to this book. For me a reason to review this book.
The book is divided in three parts. The first part, the first chapter, explains the current state of product development and shows how many organizations have structured their product development. The second part, the chapters two through seven, gives insights how Harley-Davidson’s learning environment looks like. The last part, chapters eight through sixteen focusses on the learning and discovery journey in the application of lean principles, which resulted in knowledge-based product development which helps to increase new product throughput, to reduce time to market and to improve quality.
In the first chapter we get insights in a traditional command and control product development organization using very detailed standards for product development, controlled by stage gates and where problems only show up at the end of the development cycle during testing.
In the second part we focus on Harley-Davidson’s learning environment.
Chapter two describes the history of Harley-Davidson and how Harley-Davidson made a transformation towards lean manufacturing. As a result, the organization was divided into three business areas (circles) focussing on manufacturing customers, manufacturing products, and providing the required support. At the intersection of these three circles was the Leadership and Strategy Council. This circle organization structure requires trust and unpredicted levels of collaboration, a lot of coaching and investments in personnel. The traditional command-and-control was transformed in a consensus-driven organization with decision taking by individuals, shared or group and mechanisms for managing conflicts.
To complement this circle organization a formal business process was created to empower the entire organization and fully harness the energy of the workforce. This business process is anchored with three overarching “umbrella” constants: values, issues and stakeholders. The process can be visualised with the following flow: Constants – Vision – Mission and Operating Philosophies – Objectives – Strategies – Work Unit Plans – Work Group Goals.
Chapters three and four put the Product Development Leadership Learning Team (PDL2T) central. This team embraces Peter Senge’s book The Fifth Discipline to build and maintain a learning organization (Systems thinking, Personal mastery, Mental models, Building shared vision and Collective team learning).
We get insights in the set-up of the meeting room and agenda, a code-of-conduct to enable dialogue and establishing learning conversations so the attendees will balance between advocacy and inquiry and know where they are on the ladder of inference in conversation. Based on the conversations we see the creation of a system model example.
Chapter five is all about firefighting and the tipping point. The tipping point refers to that point at which a minor change ‘tips’ the system into a new and irreversible condition. Think about a delay in one of the projects or a new project that will put the whole portfolio at risk. To solve (firefight) the problem we will use some of the resources of another project resulting in an issue for that project too and before you know you are only firefighting issues in many projects in your portfolio without delivering as was promised. Consequences of this are analysed by using a system model the PDL2T created. Based on analysis of the system model and the data two critical elements were identified. cadence and flow are necessary to establish effective and efficient multi-project product development.
Chapter 6 goes into the details of having a cadence and flow. Many organizations use a phase and gate development model. Will this bring execution certainty? Probably not, it will maintain financial control, brings discipline but on the other hand it will throttle development and flow and instil bureaucracy. Having a cadence, the rhythm and the heartbeat that drives effective product development, to pace the work is much more beneficiary to deliver more or with other words to increase the flow of delivered products (or projects). Within Harley Davidson this cadence and flow was translated in standardized pieces of work called bins representing small, medium and large projects. For every bin the scope, schedule and resources was clear. This resulted in a standard portfolio were the sequence of large, small and medium size projects was clear as well as what could be managed in parallel. In the portfolio it became clear for everybody how much could be delivered (flow) and when (cadence).
Chapter 7 goes into supply and demand. Based on data analysis it became clear that improvement of throughput of new products will result in increased customer demand.
Part III: knowledge-based product development
Chapter 8 looks into possibilities to apply lean principles in product development. Is it possible to use lean principles to create cadence and flow? You get an explanation how the Wright brothers took a systems approach to their study of flight focussing first on solving the three primary obstacles preventing successful flight (wings, power and craft dynamics).
Chapter 9 gives you a first understanding of the product development learning curve. Chapter 6 already gave some cons of a phased or stage gate development process. Here you will get some more insights. Every phase builds on the previous one and each phase has specific criteria that need to be met to continue with the next phase. This life cycle is A linear ‘design and validate’ process which promotes ‘point-based’ solutions. Key is the phenomenon that is termed “false positive feasibility”. Based on this we pass tollgates and use redesign loops to fix design problems during testing with delays as a result. See the animation.
In chapter 10 we get an explanation of product development design loops. Every design loop ends/starts with an integration point. At those integration points you control product development. And chapter 11 emphasized on learning cycles. A traditional phase gate methodology promotes progression of product development linearly through stages of development. These decision gates are intended to control risk by stopping the flow of work. As a result, this methodology encourages a linear, point-based development mind-set. Only in the last phase we have the possibility to learn and find out whether the design is truly feasible. This point-based mind-set results in false positive feasibility. Examples of learning cycles are Plan Do Check Act (PDCA) or Look Ask Model Dialogue Act (LAMDA). In linear point-based development, the learning cycles occur as unplanned rework loops to fix the problems. To avoid this, we have to follow a set-based product development.
Chapter 12 gives more insights in set-based development by explaining the usage of the limit curve. Set-based design doesn’t mean that you have to develop in parallel several options but in your design you work with bandwidths (see the limit curve) and use the data to turn it into visible knowledge. Based on this knowledge you will reduce your options to move forward in the right direction. Combining set-based development with cadence and flow through experimental learning cycles results in a knowledge-based development system.
In chapter 13 the leadership learning and pull events are highlighted. The objective of a pull event is to focus the development organization on a tangible event to force completion of a learning cycle to physically demonstrate it.
Chapter 14 gives some best practices to quickening product development. We get an explanation of combat planning. Combat planning is suited to turbulent and ever-changing conditions and relies on sound aggregate objectives where alternatives are developed by individuals in order to ensure achieving shared goals. We get insights in the usage of help chains and visual management as well as After Action Reviews (AARs) as learning tools.
In chapter 15 Oobea stands in the spotlights. The Oobea process and room is explained. This Oobea is all about collaboration and sharing. Oobea is the Japanese word for “big, open office”.
The last chapter shows that Harley Davidson made an enormous step forward by developing and using this knowledge-based product development cycle.
After reading this book I can now see why there are several references to this book in SAFe. Also the usage of set-based development is now much clearer to me as well as the negative side of stage gate development cycles and the “false positive feasibility”. A must read when you want to apply lean in product development!
For more information, see: www.theleanmachine.org