Around the world the Toyota Kata practices for continuous improvement are being practiced in diverse organisations from the traditional manufacturing to municipalities (councils), hospitals and banks to name a few.

I attended the Kata Convention in Amsterdam during April 2018 which was attended by around 130 participants from 25 countries as distant as Jordon, Israel and New Zealand!

As part of the conference I visited the Reinier de Graaf hospital in Delft which is the oldest hospital in the country seeing 450,000 patients each year with 3000 employees.  The wards there are practicing Kata to make their jobs easier and have made dramatic improvements.  Kata is being practiced in a number of hospitals in the U.S. with acclaimed success and significant savings in expenditure.

Kata Simulation Video (click here to see the simulation in practice)

In April 2018 the Kata School was established to promote the continuous improvement practices developed at Toyota and held its first Kata Simulation where participants assemble a product and practice continuous improvement throughout the day.  Individuals rated it highly, many 10 out of 10, and further sessions are planned throughout New Zealand.

Hear one participant’s comment:

Having recently completed a strategic review of the energy management programme for one of New Zealand’s largest government sector organisations, it was enlightening to use the principles of Continuous Improvement the Energy Kata way.  We started off with a bold future vision, then determined the Current State from a series of interviews and document reviews before identifying two future state options for the client to select from; an ‘Industry Good Practice’ option and an ‘Industry Best Practice’ option.  We then developed a set of target conditions to be achieved within given timeframes to meet a 3 year challenge.  The whole process is a structured way to ensure we meet the challenge and I highly recommend this process for anyone desiring to put in place a robust energy management programme.

John F Kennedy once said not to ask what the city can do for you but what you can do for the city.  Currently this is limited for many varied reasons but with the technology revolution many new opportunities are being devised.  Some of the interesting points raised at the 2016 Barcelona Smart Cities conference include;

Participatory budgeting.  Some cities including in Canada are now experimenting with using the internet to allow citizens to show their preferences for where limited funding should be focused.

Social housing.  In one experiment $1m of maintenance budget is allocated directly by the tenants.  They get ownership and participate in setting the priorities.  As is common when we give groups of people these responsibilities they use it at least as effectively as a local authorities maintenance team.

People as sensors.  Most people have a computer in their pockets these days and can easily feed back information from wherever they are in the city.  Rather than have a city full of electronic sensors which require significant maintenance, why not use people as the sensors?  This is already happening to some extent with ‘news as it happens’ and roading authorities (and the likes of Waze) take data from mobile phones to show how much traffic on any given road which is then used to advise the public of the likely travel times.

I see considerable potential for this developing further; one example; a small walled town in France has an issue with the wall crumbling as time goes on and this creates a potential health and safety issue.  Someone suggested installing many low cost sensors in the wall which would feedback centrally if there was movement in that part of the wall.  Maybe instead every citizen could have an app and when they notice any movement or cracking they could take a photo and send this to the council who could assess the photo and arrange for the necessary repairs.   Similarly I see potential for Local Authority apps so citizens can take a photo of say a leaking water pipe or an uprooted amenity tree and send it directly to the council to take the necessary actions.  The more people who report any particular fault would identify how significant the issue is and move the repair up the priority queue.

Additionally the app can make the feedback available to all people who live in a particular post code for example with an option to swipe ‘support’ or ‘don’t support’ and aggregating this citizens reporting data helps budget and prioritise.

As more and more cities become walk and bike friendly the greater the opportunity for them to be the city’s sensors.

Albania has gone from 17 cars to 170,000 cars over a short period of years and this has created the usual problems.  They now give people an app with access to CCTV throughout the city to encourage the use of public transport by showing signs of the pollution levels and what this can be reduced to when they legislate carless days.

While I was in Stuttgart, Germany (just prior to the Barcelona expo) there were electronic signs up throughout the city showing the ppm of toxic car fumes and there had recently been days when cars had been banned because the levels had reached unacceptable levels.  Another factor in the death knell of the Internal Combustion Engine.

So with all these living sensors in our city’s, let’s develop the means for them to be engaged with improving their local environment and in the process improve their sense of community.

While in Europe this month I attended a training session on ‘Toyota Kata’, a continuous improvement model for competitive advantage, based on learnings from Toyota by a U.S. professor of business improvement, which is now growing throughout Europe.

‘Kata’ is a term from the martial arts which refers to practicing a training routine until the action becomes second nature. In the business sense it refers to developing consistent management and work patterns until they become habits and continuous improvement becomes a core competency.

While I worked at ECOsystems, we identified the need to make energy efficiency a continuous process if savings are to be sustainable and developed a process we called Continuous Energy Optimisation. This training has given me further insights into developing the concept further.

Take as an example ‘Monitoring and Targeting’ which today is typically applied as a classic ‘management by exception’ routine where spikes in energy use are identified and actions taken to bring use back to ‘normal’. This routine has many limitations. Imagine instead an inspirational target and a team iterating through experimentation to achieve this target. This is a very different process and perhaps closer to how Monitoring and Targeting was originally conceived. Making this process sustainable in the long term is the key.

Given New Zealand’s Productivity Commission’s recent ranking of New Zealand’s productivity internationally, it would also appear there is a lot of scope for us to use this system to make a substantial difference to our productivity throughout industry and business.

The process starts with a clear vision of where we want to get to and breaks this down onto manageable steps or ‘targets’ towards which the company iterates on the way to achieving the goal. Continuous improvement therefore becomes part of everybody’s daily work.

I plan to discuss this in further posts but if you have any comments I am keen to hear from you.

This week I am attending the above conference.  The number of presentations is mind boggling.  To give a little taste, there are three major bodies; Smart Cities, IWater and Circular Economy.  There are 14,400 visitors, 590 Exhibitors, 421 Speakers and 600 Cities represented.

Over and above the usual, keynote, plenary and motivational speakers, there are numerous roundtables and many speakers in the following categories:

• Governance
• Economy
• Society
• Sustainability
• Mobility
• Data & technology
• Safety

After only day one I can confirm that it is highly recommended for anyone interested in strategy for local authorities.

A couple of interesting points;

1. Cities have been around much longer than countries and will remain so in the future (consider what could happen to California and the USA!!)
2. Modern cities developed more than 100 years ago and they must be much better in the next 100 years than they are today. Many have aging infrastructure, growing urbanisation means additional stress on the existing infrastructure, roads are clogged, housing is in short supply and too expensive for many including the elderly, the young and artists to name a few, technology is taking over jobs and many citizens are disengaged.

How can we use technology to improve things?

A couple of examples of what an old and modern city are doing.

Dubai

Dubai is now focused on the ‘happiness’ of citizens.  They once focused on technology but found they need buy in from the people and therefore now focus on giving citizens the information they need to make better decisions.

This has led to the need to open up the cities data and they have an interesting method of doing this.  Naturally in the initial stages department heads were very interested in obtaining the data from other departments but were adamant they weren’t going to open up their own data.  However this has now been turned on its head once the power of the information was identified.

Dubai developed a collaboration between all departments of the city.  They use WhatsApp Groups to communicate and experiment and challenge within the group.  They initially focused on neighborhoods given that a city is a series of strong neighborhoods.  They found that through collaboration there were many opportunities to do more with the limited resources available because energy, housing, community, water, cycling and walking etc. could all inter relate.

It is interesting to see the similarities here with my last post on the business improvement process ‘Toyota Kata’.  Dubai have a big vision of the future that will continue to evolve but they broke this huge goal down into manageable steps by focusing on communities and then experimented and iterated to come up with the ideas that allowed them to develop cities with ‘happier’ citizens.

The final piece of advice from Dubai was that the key is to make a start.  We can’t wait for perfect information, take one initiative, deploy it, learn from it and then scale it across the city.

Barcelona

Barcelona is considered one of the most advanced resilient cities in the world.  Twelve years ago they had ZERO budget for sustainability but they began to collaborate and based on a shared value across all participants they began identifying opportunities.

Barcelona has set up a ‘Resilience Board’.  This includes all council departments as well as all external contractors and is non competitive where they can discuss the city’s issues relating to water, energy, social housing and roading etc.  Any upgrading is then considered by the board to maximize collaboration.  All the city’s data is made available to this board.  Many efficiencies have been identified which in itself supports resilience.

The city is well down the track of developing ‘superblocks’ (blocks within streets) to move from a car oriented city to a more resilient walking and cycling city.  There will be a 60% decrease in roading available to cars within the city and a 70% increase in public space (much of this ex roads) for walking and cycling.  As someone commented, we are created to walk not to sit and drive!!  This has the added bonus’ of; better health from more exercise, much less pollution in the city and measurably lowered noise levels, not to mention citizens feeling much better about their city.

An interesting point was that initially they reduced the speed level in the ‘superblocks’ from 50 to 10 km/h and practically everyone stopped driving in these streets.

Food for thought.  How do we make our cities more resilient?  Remove cars and put the focus on walking and cycling which is better for us all?

A final thought passed on at the conference.  Let’s make our focus not on the poor being able to afford a car but on the rich preferring to use public transport, walk or cycle.

This title came to me when thinking about Jack Welsh challenging his senior managers, in the very early days of the internet, to develop a business case for running their businesses incorporating the internet and then asked them to implement the business case.  This was an example of identifying a disruptive technology and changing the business to incorporate it.

For example, rather than building jet engines and selling them to Boeing to install on their jets, the internet allowed GE to lease the engines to airlines, communicate with the engines over the internet to identify any issues and provide maintenance as required.  Quite a different business model and very successful.  He called this initiative ‘DestroyYourBusiness.Com’ which referred to destroying your existing business model before someone else did it to you.

My musings have been on the dangers of fast growth and how often businesses have been destroyed by trying to grow faster than they are capable of.  I have experienced this more than once and it can occur when a company takes on significant overheads to grow the business and the sales and/or execution are not able to ramp up sufficiently.   Even more commonly, businesses on a fast growth track do so by buying other businesses which they fail to integrate due, in no small part, to the difficulty in incorporating the invariably very different cultures.  This is hard work.

Distinguished author Jim Collins, wrote a wonderful book, ‘Great by Choice’ which chronicled companies in the same sectors, one of which went on to become ‘great’ while the other declined, failed or had to sold after a number of years.  One of the defining differences was that those that became ‘great’ consciously turned down opportunities to grow faster to ensure they were able to sustain their growth while the others went all out for maximum growth.  Think Intel compared with AMD.

A local company director of a successful engineering business which was later sold to an Australian corporate, agreed that whenever they had close to 20% growth per annum, the company had the speed wobbles.

It can be difficult to turn down seemingly great opportunities when they arise but the consequences can be far greater.

Below is a link to an interesting 2016 update on GE’s strategic thinking in an interview with the current CEO, Jeff Immelt.

New York Times interview with Jeff Immelt

A plan involves convergent thinking while strategy is all about divergent thinking. We need to think outside our own business circle and consider our clients, our competitors, our own company, what is happening on our industry and finally what is happening around us outside of all these that can impact on our business.

If our team is aware of these realities and regularly updating them, we will have prepared minds to respond to changes and take opportunities when they arise.

Here’s a small example while I was a director of ECOsystems which was focused on saving energy. As part of our strategic thinking, we had identified there was a big opportunity for councils to reduce energy use in street lighting by moving to LED streetlights (currently councils are replacing 80 watt Sodium lamps with 23 watt LEDs). While ECOsystems was a major player in lighting control work in commercial buildings, we were not a lighting supplier and street lighting was a very different market in many ways. However we commissioned some initial research to interview a number of councils about their plans to move the LEDs.

With this information to hand, when we saw an opportunity, three years later, to take on the agency for Streetlight.Vision, a Central Management Software for controlling street lighting, we had prepared minds and were ready to take on the opportunity. Streetlight-Vision

We have now developed a practical strategic thinking process that allows businesses with 25 or less employees to prepare their business similarly.

Page under construction.

If you would like to be advised when this is completed please email me at: fransp@econew.co.nz

With the rapid pace of change in todays economy, it is ever more important to ensure all businesses have a process to keep their strategy current.

For some years companies could safely rely on a strategic plan that set out the company’s direction for a number of years into the future.
Today it is generally recognized that our society is so fast moving that organisations need to make strategic thinking part of their day to day operations.

This can be especially difficult for small business leaders who have so much happening in their business that it is hard to make the time to stop and consider the company’s strategy.

ecoNEW takes SMEs through a process to ensure the companies strategy remains current and adapts to the ever changing future. In this way staff and leaders are aware of the strategic issues they face and therefore more prepared to identify the threats and opportunities to ensure the sustainability of the organisation.