An Interview with Gary Convis on A3 Thinking and Lean Leadership

An article by John Shook told a story from Gary Convis and Jeff Liker's new book “The Toyota Way to Lean Leadership”, in which Gary learned the value of A3 thinking. He recently answered some questions, sharing his thinking on the connection between A3 thinking and lean leadership, and how this tool can be applied in countless situations.

Question: How does A3 thinking connect with lean leadership?

Answer: First of all, the excerpt from the book talks about the request from Ito (then president of NUMMI) that I bring our engineers in to explain every stoppage over 30 minutes. In our plant, we had a lot of old equipment, and it was very hard to maintain. The Japanese engineers had designed it without any buffers, so one-piece flow was what had to be achieved. And imagine that, in this connected plant, if one piece of equipment stops working, then the next one stops, and so on throughout the plant. That's the way the system works – the production system provides all the motivation you need because there are no crutches. JIT means just in time: everything has to work the way it's supposed to work, because if it doesn't, you notice immediately.

I was surprised by the ability of an employee who was not close to the shop floor, but who had this uncanny ability to ask reasonably logical questions that captured what was at the heart of the engineer's mind or revealed a flaw in his thinking. I found it very interesting that you could have a finance person who could see the logic – see through a gap in the logic – and frame a question based on the story being told in the A3. The A3 really forces a person to write in a way that leads to deep reflection and to be able to express himself clearly in few words, following the context of what he did, what he intended to do and how he analyzed it. The power of the A3 was dramatic.

And it didn't happen only at Toyota. That experience showed me the value of the A3 as a tool – a flexible tool that could be applied to almost anything. I used it at Dana, in a totally different situation in terms of the use and scope of the A3. But its power has endless capabilities.

At Dana, which was emerging from bankruptcy around the time the global recession hit us, we had 30,000 people working in 26 different countries, with 113 plants and 5 different presidents. And when I arrived there as CEO in 2008, the operations people and I developed 12 essential key performance indicators (KPIs). We formed a team to implement them in a one-month trial at two businesses in each region to see whether people could fully believe in them. We wanted to check, because we planned for these indicators to become important performance guides. Eventually, we made some adjustments, and they became the standard we rolled out around the world. Later, we added a standard meeting area with the KPIs on large boards – a big obeya throughout the whole plant. Compared with what we had before, from a cultural perspective, this was very different. Previously, there were no standard KPIs, and if they existed, they were kept in a plastic sleeve, in small, yellowed print that nobody ever looked at. So we adopted a clear objective of making the KPIs meaningful and visible to motivate the whole workforce. (Later, we cascaded the indicator board down to each area.)

This allowed us to establish in 2008 a performance baseline for the following year. To sustain this initiative in 2009, at the end of 2008 I asked each one of the 113 plants around the world to develop an A3 focused on two things: improvement in conversion costs and inventory reduction. I kept it strictly focused – I didn't ignore safety or quality – but we were in the throes of the worldwide recession and we needed to survive as a company. We needed to keep the focus at the most relevant level. We needed to keep jobs, and the business had to cut costs while revenue was falling. We needed cash to operate. At this first cultural stage, we at the top set the targets – which were not negotiable.

I used the A3 format as a way of seeing inside the minds of the managers of the 113 plants. One of the important things I learned at Toyota was hoshin kanri, which means aligning with the company's objectives and how I am going to achieve my objectives. And I learned that Toyota really values the word kanri – HOW I am going to achieve my objectives. Most Americans value the hoshin. And I didn't want to keep it that way. I learned that the means and the process are as important as the goal. So, at Dana, I said I wanted people to tell me how they were going to achieve the inventory reduction targets line by line. Whom do you need, what resources are required and what action plan will get you there? I wanted to force them to understand what would actually lead them to achieve the cost and spending reductions set in the target.

So, in mid-December, we set aside three days and got in touch with the managers of all the plants, setting up a web connection to communicate. They sent us their A3s, and we reviewed them one by one, plant by plant, in different languages. We listened to them (in groups of five) from 7 in the morning to 11 at night for three days in a row. We made comments line by line as the review took place, and sent the A3s back to them electronically with our assessments. Some were acceptable, some raised questions and half of them were not accepted in the first round. We shared the feedback on why they had not been accepted and told them that by January 4 they had to send us the revision, and we would get in touch again. After that, we selected one person to call, weekly, every Thursday from 7 to 11 at night, all the plant managers over the following week – using the 5 whys and getting them to think deeply about what they were doing. This was essential, or the actions would have been pushed out until close to the due date and there would be no ongoing learning. We also had continuous improvement specialists as coaches (mentors).

That was the process in which I used the A3 to guide our objectives and to follow up and get the plants to focus on realistic initiatives that would achieve the objectives. Many of the A3s were unfinished in the first year, but we got past that. We achieved our targets of $ 200 million in conversion costs and $ 200 million in inventory reduction. That convinced people that it was an excellent process for learning and achieving objectives, and much more than a simple piece of paper. I believe consistency is important in operations. Every year, even after I retired from Dana, they keep doing the same thing. Sometimes they start earlier. And now they get all the department heads to use the same A3 format. They use this tool for cost, quality, productivity, safety. The A3 has now become a commonly understood communication tool used throughout the company. For example, our vice president of engineering believed in its power from the start and used it to drive a series of improvements in R&D.

I tell my managers they should be able to take that paper home and explain it to their 10-year-old children. The words on the paper and the story have to follow some logic that the person can see. They should see the context, see what they need to analyze. Above all, the A3 should tell a story. That's the key point. Mr. Ito's A3 was used to tell a story about a breakdown. The one I used at Dana was for achieving objectives. I used the A3 for all the other phases of greatest opportunity in our business. It is a flexible lean tool.

Portuguese translation by Tamiris Masetto Manzano.