The Dawn of a new Lean approach

By now most people that work in and around Lean understand that Vilfredo Pareto’s 80:20 law is alive and well, and not in a positive way. From all of the organisations that make an attempt the transition to Lean 80% ultimately fail.

What baffles me about this situation is that organisations have continued to utilise the same coaches and consultants, and therefore the same approach, to support them in their endeavours, and they in turn continue to deliver the same results, 80% failure. Is this not how Einstein defined insanity? Unfortunately there is little in the way of options in the Lean market place today and those that are currently making money out of this approach are, understandably, loathe to change.

The popular approach is to emulate what Toyota does, due to the fact that Lean has its origins in a study of Toyota that led to the publication “The Machine that changed the world”, unfortunately observation and study does not unearth what Toyota does, it unearths what Toyota has. This then leads to the application of what can be seen at Toyota including Standard work, 5s, JIT systems, Work balancing, A3 problem solving et al. This however is only a small subset of the entire system, not the system as a whole.

If you bought a car based on what you can see on the outside don’t be surprised when it doesn’t work due to there being no engine.

What’s missing is a clear and structured method by which organisations can learn those parts of the system that are almost always missed, either deliberately (in the too hard basket) or through ignorance. These are the things that equate to the tools adding value sustainably and also add the rest of the system to boot.

The current model delivers on continuous improvement and a focus on reducing Muda (one of the 3 types of waste) but where is the engine, i.e. respect for people and the focus on Mura and Muri?

Herein lies the problem. Organisations need to stop emulating what Toyota does and instead concentrate on what Toyota did and why. Only once this is understood can they begin to build their own production or operating systems. They should forget the templates, the forms, the documents that are introduced by consultants and external coaches and understand at depth what drove the development of those tools. Then, if the need is there, consider how can they best provide for this need.

I have been working for almost 20 years on building my knowledge in this area both from within Toyota and externally to it. I have been guilty of adopting the standard approach in many organisations and I have contributed to the 80% failure rate. I have however made note that those businesses that are successful have something else, something different from the rest, they have an engine.

Recently I have worked on distilling my 20 years of experience into something new, an approach which, to my knowledge has never been tried before and one that I think will turn success rates around. We cannot continue doing the same thing and expect different results.

This approach takes my knowledge of Toyota, my knowledge of the failure and success of Lean change and the principles, beliefs and behaviours behind the building of Toyota’s production system and creates a clear pathway to becoming Lean for any organisation that has the need and desire to succeed in this space.

5s - What exactly is it

The intent of 5s is much more than just housekeeping. It is more about creating and maintaining a standard, structured and efficient workplace. This has to be done with the involvement of those that work in the area with consideration being made for ergonomics and usage frequency.

The 5s’ 

The 5s’ are 5 Japanese phrases that begin with S (as do the English translations)

Seiri – Sort

This requires the work group from within the working area making some decisions on what is used regularly, what is either not used or used rarely and what within the area can be thrown out thereby ensuring only required items will be stored within the area.

Seiton – Systematic Arrangement

Now the team must decide on the best location for all items that are to be returned to the area. All items to be returned must have a space allocated and demarcated, making it visually obvious when things are missing, misplaced or out of position. Consideration must be given to ergonomics, manual handling and usage. Items utilised most often should be situated closest to the user progressively working outwards from the user as usage levels reduce. Likewise heavier items do not need to be stored in high positions or, for that matter, low positions.

Seiso – Shine

Everything to be kept in the area must be kept clean and tidy. This is not only good for the morale of the people working in the area but it also offers those an opportunity to check and inspect all items.

Seiketsu – Standardise

Once the area has been 3s’d, the agreed new standard has to be documented and displayed prominently in the area.

Shitsuke – Sustain

Regular inspection and maintenance is critical in the early stages of any change. 5s is no different. This is the responsibility of everybody.

How does 5s’ create customer value?

Quality – Quality is improved as the correct tools, parts etc., are located within the area of work and anything that is not required is removed. This makes the task of fitting incorrect or damaged parts or utilising the incorrect tool difficult at the very least and preferably impossible.

Price – As quality is increased reworks and defects are decreased. This cost saving can be reflected in the price, where appropriate, of the product/service ensuring competitiveness.

Lead times – Right first time percentages will increase and so lead time is reduced as a consequence.

How does the business benefit?

Safety – An organised workplace is a safe workplace.

Morale – Who wants to work in a place that is unclean, untidy and it takes you forever to find the things you need quickly?

Wastes Removed  - The immediate improvement will be in the reduction of Waiting and motion waste. Flow rate is increased as product/service/process/people does not have to wait whilst rework or replacement takes place. This in turn will mean that “just in case” Inventory can be reduced. Wherever we can reduce inventory levels will also mean reductions in Transport waste as we do not have to pay for the logistics involved in moving Defects around.

Benefit to the workforce

Ability to find things quickly, efficiently and consistently resulting in a lighter workload. Clean and tidy working areas.

Workforce role in 5s

Improve and sustain

Benefit to Managers

Visualises the area/workplace thereby offering an opportunity to challenge and discuss concerns raised when the visuals and the actuals do not match. In this instance there is something wrong, this must be investigated and corrected, in the name of continuous improvement.

Challenge – Any item where the actual does not match the expectation or standard.

Genchi Genbutsu -  When in the Gemba, non standard situations become obvious and therefore more difficult to ignore or bypass.

Continuous Improvement – Obvious variability from set standards require improvement to rectify.

Respect for people – Those, challenged variations, should be rectified by those that work in the area. There should also be a constant expectation that agreed standards are challenged for improvement by those that work within the area. As the work force is given back time, it becomes the managers responsibility to create focus on further improvement or ensuring that this newly available time is filled with other value adding tasks

Teamwork – Work groups improve the area themselves, with support.

Management role in 5s

Support teams by allowing them time.

Set clear expectations for both sustainability and improvement.

Challenge ALL non-standard situations.

NEVER ignore ANY non-standard situations, respectfully raise and challenge the situation, establishing a clear expectation for rectification.

Be visible and active in 5s activities and take part in sustainability measures.

Common Issues to look out for

3s fever – Any organisation that states “we have done 5s and it doesn’t work here” I can guarantee has not actually completed the 5s process. Most often what they have actually done is 3s. This is understandable because this is where the action is and where the visible and tangible improvements are evident. This fits well with those business cultures that are not supportive of Lean i.e. “we are happy to solve the same problem over and over because it makes me look like a hero rather than solve the issue once and for all allowing me to work on more value adding activities.”. 3s fever leads to areas that look great, short term. These areas soon become victim to “stealth” dumping and quickly revert to messy, disorganised and inefficient workplaces that hide all of the expensive wastes previously discussed.

Lack of Challenge – In other situations there is 4s, with the visuals and standards being in place. What is going on in these workplaces is that the manager does not really care. The result is that they do not set improvement expectations and they do not challenge any variation from the agreed standard. The managers lowest expectation becomes their people’s highest.

Old Standards – Occassionally improvements are made quickly and with little consideration for ensuring that documentation is aligned. When and wherever we have established a standard we should always make it a priority to ensure it is kept up to date. 

Summary

5s is a foundational tool of any Lean management system. It has the ability to highlight many wastes and has many benefits for both the organisation, their people and their customers. The state of an organisations 5s efforts is a fantastic reflection of the organisations leadership. Poor 5s equates to poor, or at least non supportive, Lean management systems.

The Purpose of becoming Lean

For Organisations

On my initial meeting with an organisations Leader the first thing I need to know is “Why Lean and what are your aims and goals of this engagement?”, this question, and asking it right at the outset of the engagement achieves 2 things for me. Firstly it gets the executive thinking in an open minded way and presents me with a window to challenge that thinking, and secondly, it allows me to assess the Leaders mindset and consequently the organisations culture.

Unfortunately most organisational leaders immediately begin to speak of cost reduction. Some may even state that they are attempting to “become the best” in their field of expertise, this without any real substance, vision or strategy of just how to achieve this end.

It is only truly enlightened leaders that have a vision beyond short term cost reduction and these leaders speak of growth, expansion and improving the working lives of their people. I see it as my challenge to help the less enlightened see how these things are the drivers for a truly successful transformational change effort.

To understand this, one must first understand the purpose of Lean and, in my opinion; the best place to get this information is direct from the horses’ mouth.

Taiichi Ohno is considered, by many, to be the father of Lean. He was a Japanese businessman whose work was fundamental in building Toyota’s production system which was later adopted in the US and named Lean.

On describing the Toyota production system and therefore Lean Ohno says:

“All we are doing is looking at the time line, from the moment the customer gives us an order to the point when we collect the cash. And we are reducing the time line by reducing the non-value adding wastes.”

This statement has no mention of cost reduction, only time reduction and, in practice, when you analyse the improvements that are made by the application of Lean tools they are all measured in time, not currency.

Of course we all know that time is money but Ohno’s statement is just one example of the many subtleties that are fundamental to Lean success and sustainability. It is all down to the way in which we look at and interpret our situation. It requires the correct mindset. There is a huge difference between having faith that cost savings will come if we focus on removing the wasteful things in our work, and focussing wholly but with blinkers, on cost reduction. A good organisation will focus constantly on safety, quality, on time delivery and its people as well as cost in equal measure. Favouring one over the others can result in catastrophic failure. For example what do you suppose might happen if an organisation focussed on DIFOT (delivery in full on time) over all other measures (SQCM)? As it becomes apparent that this measure is in danger of being missed panic ensues, more people are thrown into the mix, corners can become cut and work arounds become the norm. Consequently safety is at risk as there are more people in the same area, and with probably lower skill sets and familiarity, quality is at risk, “just make sure the order gets completed on time, no matter what!”. Also more people equate to more cost right? What do you think happens to morale in this situation?

An organisation that has been on their Lean journey for a little while will soon begin to realise that they are now able to achieve much more with much less. They will also realise that they now have a decision to make, how do they manage all of this extra time?

1.     Put extra effort into filling the newly created capacity with more product or new revenue streams.

2.     Reduce costs by removing people from the organisation and continue to produce the same volumes.

Be aware that any organisation that chooses option 2 also chooses to immediately end their Lean journey. Lean requires the people from within the organisation to be fully on board and engaged with the effort. There is nothing more guaranteed to kill an organisations morale than redundancy.

A truly Lean organisation is constantly shifting focus between sales and R&D, in order to fill capacity, and operations, to create the capacity for new revenue streams and increased sales.

For Managers

“I just don’t have the time” or “I’m too busy”, are common statements I hear from managers all the time. Managers are generally time poor and have their heads in the fire of daily operations to such a level that they become blinded to what is around them. They work on building-in short cuts and work-arounds just to get the job done and all too often they are commended for this behaviour. Unfortunately these things all incur associated costs and build in waste, and invariably the problems will just return time and again. In the long term and, inadvertently, they damage the organisation which they are so passionately trying to protect.

What Lean does for managers again, is give them back time. It aims to engage the manager’s people in solving their own problems (with guidance, of course) and have them removed once and for all, never to return. However Lean also aims to ensure that they never run out of problems on which to work, this we call continuous improvement.

For the workforce    

Making people’s life easier or better in some way is what drives me, and it is this that makes my work worth the effort I put into it. It is for this reason that I have worked with Lean for almost 20 years.

Visualising the workplace and standardising it through the application of Lean tools, presents everybody with the opportunity to optimise their work, their workplace and their working situation.

In my experience, when people go to work, they just want to do the best job they are capable of, with as little disruption or interference as possible. Anything that constitutes or creates these things is seen as an annoyance and only serves to create frustration and lower morale.

In Ohno’s statement he speaks of “reducing the non-value adding wastes” these things are generally the same things that people do not like having in their work, those things that create low morale, so anything that supports the removal of those things can surely only be a good thing.

The morale of the workforce soon begins to lift as they realise that they are spending more time on adding value and much less on those things that get in the way of them doing so.

Troy has almost 20 years of Lean experience both as a practitioner and Lean consultant across many industries including automotive, manufacturing, mining, oil and gas and bio technology.

Troy can be contacted by calling on 0477 428231.

Executives, you want change? Then change!

Almost every organisation I come across these days seems to be under pressure and all are chasing an elusive, better, improved future. Many have attempted to apply various methodologies, Lean, six sigma, theory of constraints etc., etc. They have applied change and change management principles to their frontline people, their frontline management and even their middle management tiers. Many are still struggling, few ever realise a sustainable change despite their best efforts and 80% plus will give up within 2 – 3 years and move on to the next big thing claiming previous methodologies don’t work in their situation.

This conclusion is, in most cases, a fallacy.

 Executives, it’s time to wake up! Take a look a bit closer to home, ask yourself where and how you have failed your people your communities and not least your organisations and where you can do better. If you want change in your organisation YOU will have to be an active part of that change, it takes a whole of team effort and unless you are on the bus you will fail, guaranteed.

Now is the time to shift focus, widen your horizons and learn new ways to engage your people to willingly assist you in developing and building your new world beating organisation.Your challenge number one is to forget all that you currently think of as management or leadership and adopt a brand new approach if you truly want to make change happen.

Here’s 10 ways that YOU will have to change

1.     No-one ever became the world’s best in 2 or 3 years, accept it. You are in for a long, but exciting, ride. Athletes or artists or musicians don’t become no.1 overnight, it takes focus, development and persistence on a constant and continuous basis. This same principle applies in business.

2.     Do not set end point goals and targets, the best organisations never get to the end, they have an acceptance that there is no end; they are focussed on CONTINUOUS improvement and development.

3.     Forget quick wins and low hanging fruit, gather these on the way as you’re passing but set your goals much farther afield.

4.     Cost reduction breeds a negative mindset, leave it alone, and focus on growth and expansion instead. Spending time on identifying and eliminating waste in your organisation will give you and your people more time to add value for your customers (whilst coincidentally reducing cost as a result) It won’t be long before you will be looking for more sales, products or revenue streams. These things are all positive for the organisation and create positive opportunities for your people.

5.     Once you have your long term vision and goals set do not forsake them for the short term.

6.     Forget the notion that you know best. Accept that this accolade belongs to the value adding people in your organisation. Those who without which your organisation wouldn’t exist. Your workers.

7.     Realise that your work consists not of telling people what to do, but rather of asking them how you can support them in improving and making their work easier.

8.     Take a look at the seat of your pants, if there is sheen then you are spending too much time in your office and have done so far too long. You cannot understand your business or your people from behind a computer or sat in your ivory tower. Getting amongst it and talking to your people is not that scary, try it sometime and make it a daily habit.

9.     When problems arise seize the opportunity to develop yourself and your people. Don’t waste time or demonstrate a lack of respect by looking to apportion blame, demand and visibly assist in the effort to seek out understanding, root cause and countermeasure.

10.   Extend your vision not only in terms of timelines but also in holistic business. Focussing your efforts on improving the performance of organisational silos will only deliver a fraction of the benefit of drawing back your focus to the whole of business level. To do this you must maintain a clear understanding of and focus on delivering value, and only that, to your customer.

Do you think you can do this?

Yes? – Great, you have a chance and an opportunity to build something great.

No? – Get the lifebelts out, you’re going down!  

What is Lean in 10 points? (quotes byTaiichi Ohno.)

1.     An American translation of Toyota’s production system.

"Where there is no standard there can be no Kaizen"

The phrase Lean can be traced back to a 1990 book entitled “the machine that changed the world”. This work was authored by James P. Womack, Daniel T. Jones and Daniel Roos and was a study of Toyota’s production system. Unfortunately through that translation, much of the effectiveness of TPS and Lean have been lost, for example, Kaizen is commonly translated to mean simply continuous improvement. This however does not do a Kaizen culture  justice. The word Kaizen is often followed by blitz or event. This is an obvious oxymoron. How can you have a culture of CONTINUOUS improvement that is dependant upon events which by nature have a clearly defined beginning and end point?* These events are generally led by leadership figures from within the organisation, with little to no engagement of the standardised work owners, and have a short term goal. The result of this is that Kaizen culture has been demeaned in the minds of organisational leaders, with many failing to realise the value in “a million $1 improvements”.

Establishing a Kaizen culture expectation is a crucial step in facilitating a Lean transformation the engagement of everybody within the organisation in that culture is also critical.

2.      A hands-on system of management.

"Don't look with your eyes, look with your feet. Don't think with your head, think with your hands."A Leader should "wash their hands at least 3 times a day"

In a Lean management system the Leaders have to be part of the system, not something greater than it or detached from it but actually part of it, a critical member of the team. ALL leaders should interact with the system on a daily basis, they should seek out knowledge and understanding and they should challenge the existence of waste wherever they go. The leader of a Lean organisation does not live in an ivory tower, as they cannot function there, they situate themselves in the gemba and they practice genchi genbutsu constantly. How else can they truly understand the business that they are leading and the problems that are being felt by their people? 

3.      A transformational management system.

“Standards should not be forced down from above but rather set by the production workers themselves.”

Traditional management styles have the almighty leader sit on a pedestal, they are the all-knowing eye, there only to be obeyed, and this unfortunately is just how many of today’s management figures like it. This type of leader is seldom seen in the Gemba as they view that place as beneath them, surely the whole point of working hard to become a manager is to put distance between you and real work right? Wrong! Transformation is not a one man task, and make no mistake, transformation is exactly what becoming Lean will require, it requires the buy in and engagement of everybody. You cannot tell people they have to change and just expect them to follow your direction, change is a much more personal and emotional beast. If a Leader is to be successful they have to appeal to the emotional drivers of their people, the reason that people work for their organisation and not someone elses, the reason they drag themselves out of bed in the morning and show up each day and what it is that makes them feel valued. You could call this their purpose.

Leaders in Lean organisations are servants to the workers, those that actually add value in the business. Their role is to ensure that they provide their people with robust, reliable and repeatable processes and ensure that anything that gets in the way of this is challenged and removed. They must also provide development opportunities for each and every member of their team.

4.      Focussed on removing waste.

“Wasteful action is not work”

By now most people are familiar with the concept of removing waste and, when asked, most practitioners can recite the 7 wastes, or at least a common acronym that relates to them such as TIM WOOD etc., but this is only one third of the story, Muda. Two, much less well known waste types, but of equal, if not more importance are Mura and Muri or Unevenness and Unreasonableness respectively.  So why are these waste types not spoken about or attacked with the same gusto as Muda? In many organisations they reside in the “too hard basket”. They are often the result of deeply engrained behaviours and practices of senior leadership figures and/or a belief that they are helpless to do anything about it.  

Mura or unevenness leads to Muri. One day everyone is rushed off their feet and are failing to make the numbers, and the next day there is very little work and people spend their time undertaking non value adding tasks just trying to look busy. These swings can be daily, weekly, seasonal or cyclical. The result is broken down people and equipment, as both are bored or idle one minute and pushed beyond what is reasonable or even possible the next.

Often Leadership decisions, in this situation, focus on balancing their human resources to match the customer demand, as this is easier than the option, which is to look at how they can best manage their inventory to level out the production over the period (Heijunka). Unfortunately this constant shift in resource base is demoralising for people and attrition rates, as a result, will be high.

5.      A strategy for long term prosperity and growth.

“All we are doing is looking at the time line, from the moment the customer gives us an order to the point when we collect the cash. And we are reducing the time line by reducing the non-value adding wastes.”

All too often I hear organisational leaders state that their strategy for implementing Lean practices is in order to “reduce costs”. Cost reduction is a result of a Lean transformation, without a shadow of a doubt, but as a strategy this approach is seriously flawed.

Ohno’s statement above is a demonstration of an alternative strategy. Note, there is no mention of cost reduction only in Lead time reduction and waste removal, and, in fact, the deliverable from the application of each of the Lean tools is time. Each time we remove or reduce a waste we give back time i.e. we can do the same amount of work quicker or, as an alternative, we can do more work in the same time. We now have more capacity. The difference between success and failure of your Lean transformation lies in what you decide to do with this extra capacity.

An organisation with a strategy of cost reduction will make redundancies, thereby ending their Lean journey as this demonstrates to your people a lack of respect for them and their abilities.

An organisation with a growth strategy will seek to fill the new capacity with value adding activities by increasing throughput through increased sales, R&D or introducing new and/or innovative revenue streams.

6.      Focussed on pull and value from the customer perspective.

“It takes great effort to follow the rules of a pull system ... thus a half-hearted introduction of a pull system brings a hundred harms and not a single gain.”

If we can get to a point where we only deliver what the customer requires to the quality the customer requires when the customer requires it and in the quantities the customer requires then we have very little waste and therefore very little in the way of excess cost. To get to this point is a long and arduous journey that requires an organisation to be stable and their processes to be predictable and repeatable. It is for this reason that Pull should be seen as an advanced principle and should not be introduced too early. Take a look at a diagram of a TPS house or temple. You will see that pull sits within one of two supporting pillars (the JIT pillar), these pillars both sit on top of a foundation that consists of standardised work, Heijunka (work balancing) and Kaizen unless these elements are well embedded within the organisation and have become “the way we work” the organisation will fail to make any attempt toward Pull stick. 5s is a simple tool (that sits within this foundation) to manage and sustain and yet most organisations can’t even manage to make this stick, pull then is way out of reach.

 

7.      The development of a learning organisation

“Having no problems is the biggest problem of all.”

The tools of Lean are there in order to develop the thinking of the people within the organisation and to push their understanding to a deeper level.  In particular, practical problem solving or A3 problem solving. Problems should be viewed as precious gems, prized for what they offer us. They give us the ability to challenge ourselves and our processes and develop ourselves whilst at the same time facilitating the existence of continuous improvement. When someone raises a problem to a leader they must welcome the opportunity with open arms not tut or look to the sky for divine intervention or even dismiss the person as a nuisance or annoyance, there should be an expectation that those affected by the highlighted problem, solve and remove it. The leader is there to support this process and should do this in any way that is deemed necessary and/or possible.

8.      A system of 2 unequal parts.

“When you go out into the workplace, you should be looking for things that you can do for your people there. You’ve got no business in the workplace if you’re just there to be there. You’ve got to be looking for changes you can make for the benefit of the people who are working there.”

TPS is often shown (as in the illustration for this article) as being made up of 2 parts, continuous improvement and respect for people. The interesting thing here is that these 2 parts are actually unequal in size (here I am referencing Toyota’s own publication “the Toyota way” of 2001). The dominant part is respect for people.

When Lean fails it is almost always due to the lack of understanding or even an attempt at improving in this area. In fact, most Lean transformational attempts completely ignore this most important part of a Lean management system in favour of a quick application of the Lean toolset , which all fall into the continuous improvement side of Lean. The reason for this is that tool application is easy, the results are obvious and ROI can be reported against. It results in changes happening without people within the business having to change their behaviour i.e. they can continue to demonstrate a blatant disregard for respect for people as has been built into traditional, transactional leadership styles. The result is that benefits are short lived and eventually any benefit that was gained is lost by the collapse of the system.

On the other hand those organisations that make an effort to understand respect for people (and it will take some effort) and facilitate changes in their people’s behaviour to demonstrate this respect, whilst at the same time carefully facilitating the introduction of the tools, to develop their peoples knowledge and understanding, will witness a slower uptake of the system and a slower ROI but over time the system will grow and sustain and the application of the PDCA cycle (continuous improvement cycle) will pick up momentum, soon overtaking the level of benefit that the first scenario could ever achieve.

9.      A new way of doing business.

“The key to the Toyota Way and what makes Toyota stand out is not any of the individual elements - but what is important is having all the elements together as a system. It must be practiced every day in a very consistent manner, not in spurts.”

To be successful with Lean an organisation will need to be brave, have a certain amount of faith and understand that every assumption, process, practice and behaviour, regardless of how deeply rooted in the business it is, will be challenged. The old way will need to be uprooted and thrown away and Lean developed and nurtured to take its place. Lean is not a tool, it is not a tool kit it is an entire Leadership, management and production system. It has to be the only system as it will not gel with anything else. You have to undertake the effort wholeheartedly with open eyes and an open mind. Do that and the sky’s the limit.

10.  People reliant.

“Why not make the work easier and more interesting so that people do not have to sweat?The Toyota style is not to create results by working hard. It is a system that says there is no limit to people's creativity. People don't go to Toyota to 'work' they go there to 'think'”

NO BLAME!

Lean requires that everybody across the organisation is engaged, it requires that everybody understands and demonstrates respect for people. There is an expectation in Lean organisations that those that add value, understand their processes best and Leaders are there to support the removal of anything that doesn’t add value. When problems occur it is the value adding people that are expected to resolve those issues with the support of the leaders. Value adding team members are expected to improve their processes and identify and remove waste, again with support. The first time you hang blame on a person as the result of an issue or problem will be the last time they partake in the system. Lean leaders focus on systems and processes and if there is a problem then it is because the process is not fit for purpose or has malfunctioned and has let down the team. The leader has to take ownership of this, thank people for giving them the opportunity to improve and work with their people to rectify the issue.  

·          Management led improvement activities are part of TPS and are known as Jishuken these activities are distinct from kaizen improvement.

This week’s questions:

1.       Which of the above mentioned issues are you currently guilty of?

2.       What can and will you do towards changing this situation?

How to change at the top?

The picture to the left has been doing the rounds on LinkedIn for a little while now, but how relevant is it to any organisation trying to be successful with Lean transformation?

Note that there is only a two letter difference between the two quoted sentences but why such a difference in response?

Many of the organisations I have come across, that are fervently chasing the Lean dream have unfortunately and unwittingly put themselves in the top illustration.

This organisation knows that things are not well, and that things have to change if the situation is to improve, they would be an organisation that is, at the least, struggling or at worst in their final death throws. Who in their right mind wouldn't want things to be different given this circumstance?.

The unfortunate thing though, is that without the people within the organisation changing the way they think, act and behave, Lean will never take hold. Albert Einstein is quoted as saying the definition of insanity is "doing the same thing over and over again and expecting a different result" which means that, by all accounts, many of today's organisations are being managed and lead, by mad people (I think we can all identify at least one.). Now something else to note is that when I say "the people" need to change, what I mean is, all the people, EVERYONE, not just frontline staff, not just supervision, not just management and not just the c suite, EVERYONE! There has to be a paradigm shift in the culture of the organisation. Achieving this is a very tall order, it takes immense effort ( a few quick wins or the removal of some "low hanging fruit", just won't cut it), time and persistence, both personally and professionally, at all levels of the organisation. This is then, a much more daunting proposition than the first which would always lead to the lack of optimism demonstrated in the lower illustration. However the rewards over the long term are immense.

There is no Comfort Zone in a Lean organisation 

According to Maslow' hierarchy of human needs second only to one's physiological needs, people seek safety. In a world that is ever changing (continuous improvement) it can be extremely difficult to achieve this most basic of human requirements and it requires a different type of Leadership to the traditional transactional style utilised in most organisations, This is why the largest part of any Lean transformation attempt is the demonstration of Respect for people. If respect is demonstrated in the correct way, with no blame being apportioned and problem raising being welcomed with open arms, then those working within the organisation begin to feel safe and secure with change and with challenging the norm. They become engaged and they develop a drive to support and innovate and even create a culture of perpetual improvement.

My questions for the C suite this week are:

1. How have your past actions and behaviours created an air of uncertainty and insecurity in your people?
2. In what ways must you alter your behaviours to ensure that your people feel safe and secure in their roles going forwards.
3. What actions can you take to demonstrate these behaviours? 

Is Human Capital Improvement the answer?

Recently I met with an executive from a large Australian organisation to discuss progress of their Lean transformation. At some point during the conversation the executive said "Managers have only 3 things that they need to achieve, 1. their output, 2. the output of their people and 3. continuous improvement in both 1 and 2." If this is true then why is it that:

1. 70% of change initiatives fail (Kotter, 1995)
2. 67% of transformation efforts fail (McKinsey survey of 3199 execs.)
3. Only 30% of 1546 executives rate their initiative as successful (Keller and Aiken, 2008) even
4. 70% of mergers and acquisitions fail to achieve outcomes (Weber and Camerer, 2003) 

Maybe these initiatives are being driven in the wrong way. One thing is for certain something needs to change.

According to  The Conference Board CEO Challenge® 2014: People and Performance the number 1 challenge for CEO's in 2014 was Human capital (operational excellence was #3 tied with Innovation). As part of that challenge Leaderships ability to Lead change was cited as one of the top 5 attributes critical to a leaders success. "The conference board 2014" then goes on to present the CEO's ten strategies to improve on their human capital challenges:

1. Provide employee training and development
2. Raise employee engagement
3. Improve performance management processes and accountability
4. Increase efforts to retain critical talent
5. Improve leadership development programs
6. Focus on internally developed talent to fill key roles
7. Enhance effectiveness of the senior management team
8. Improve effectiveness of frontline supervisors and managers
9. Improve corporate brand and employee value proposition to attract talent
10. Improve succession planning for current and future needs.

Lean is, when done correctly, a transformation strategy and as such often falls foul of all of these issues. My second question then is:

What actions could you take to improve the situation of your organisations "human capital" (I detest the term) in each of the ten areas listed above?