by Terry Burton | Blog, Uncategorized
LEAN STRAIGHT TALK SERIES #4
Introduction
Most organizations have missed the mark on transforming culture as the critical foundation to any strategic improvement or transformation initiative. Culture is key to sustainable Lean and CI success because it involves deep, continuous behavioral alignment learning and human development. A fanatical focus on the methodologies and tools is analytical learning, which is much easier but not sustainable without a winning cultural foundation. Decades of Lean and CI programs with their respective birth-death cycles have moved the needle of culture change in many different confusing directions. Today, the cultural climate in far too many organizations is like a worn flat tire, and they’re not going very far until they change it. Too many organizations are so blindly committed to their current initiatives (which are not working so well), and are not able (on their own) to put the keys down and rethink their journeys. Even though we’re talking about Lean and CI, the real problem is resistance to change.
“Today, the cultural climate in far too many organizations is like a worn flat tire, and they’re not going very far until they change it.”
Organizations must recognize and accept transforming culture is a living, structured, deliberate, consistent, and continuous process of cultural development. Cultural development occurs from the top down leadership behaviors, choices, and daily actions. Cultural transformation is a living response to (good and bad) leadership behaviors, choices and daily actions and occurs from the bottom up. Culture changes by choice, not by chance. This post provides new insights about how to treat cultural transformation as a living process and achieve superior and sustainable performance with your Lean and other strategic and operational improvement initiatives.
Culture Change is a Living Process
How should organizations approach these challenges? It helps to think about culture change as a continuing deliberate process of development, nurturing, reinforcement, and renewal. In my recent book, Global KATA: Success Through The Lean Business System Reference Model, I presented a process perspective of how to develop, nurture, reinforce, and renew cultural transformation. The remainder of this post provides an overview of this process. Culture change is a deliberate process of defining, nurturing, reinforcing, and renewing the complex human attributes of culture. Using a process approach, executives can establish goals, implement culture change activities, listen to the voice of the organization, measure gaps between current and desired performance, and make the right necessary course corrections to keep culture change in a continuously developing mode.
Internalization – The Goal
Internalization is a process of transforming culture through critical mass acceptance. Internalization is the deliberate, human-focused process of installing shared beliefs, values, assumptions, attitudes, and organizational best practices about improvement into the consciousness of individuals, groups, and the organization as a whole. Over time, internalization becomes the acceptance of a set of norms, strategies, and expectations established by and maintained by leadership. The process begins with defining, communicating, and learning the desired cultural values and attributes. Then people go through a process of understanding why these values are critical to success and why they make sense. Finally they accept the norm as their own created viewpoint. In effect, internalization is the interpretation process of formal and informal communication that creates cultural conditions and shapes Kata.
The diagram below provides an overview of the internalization of adaptive systematic improvement. Note that the diagram represents a single cycle of cultural evolution, which is a continuous, never-ending role for executives. Discussing culture and how to cause it to evolve to higher standards of excellence may sound a bit Zen-like and Freudian, but it is more common sense than anything else.
This deliberate and longer-term process of internalization is achieved through proactive management of four specific cultural conditions:
- Projection
- Introjection
- Identification
- Incorporation
These cultural conditions are dynamic and easily influenced by real and perceived events. They require continuous attention and management so that they can continue to transform culture in a positive direction. When the gurus of the past 30 years talked about continuous improvement as a relentless, never-ending process, they meant what they said. Continuous improvement is not easy; It has taken Toyota 70 years and counting to get to where it is today. Like everything else it becomes automatic and routine (Kata) at the mastery stage.
Projection
Projection is the initial defense mechanisms that occur in response to improvement and change. Fear is the major driver of projection because individuals are afraid of all the perceived loss, effort, commitment, discipline, sacrifice, risk of failure, and disruption to their established norms. When individuals do not understand the what, when, where, why, who, and how of improvement, they fabricate negative thoughts. The more people think about change, the perceived losses, and their unanswered questions, the larger their initial barriers grow. The signs of resistance are obvious: silence, deflection, criticism, confusion, denial, easy agreement, pocket vetoes, excuses, or “whatabout-itis.” Projection is the attempt people make to put space between the inner self (norms) and the external environment (change).
Projection is also positive. Every organization has the initiators and early enlistees of improvement. These associates generally have positive attitudes and see the glass as half full instead of half empty. They may have similar concerns as others, but they see more good than bad in improvement. Leadership, communication, and education are the means of dealing with projection. This phase is the early stage of the next cultural condition called Introjection.
Introjection
Introjection is a group version of projection. As associates begin talking with each other about their individual perceptions of change, the exchange (positive or negative) becomes a collection of data points that shapes the perceptions and visions of improvement and change. Associates are drawn into beliefs or are influenced by others internally by the communication that they are receiving from the external space. Through this cultural condition, individuals replicate in themselves the behaviors, decisions, actions, attributes, or other fragments of associates around them, especially leadership or lack thereof.
Introjection is a dynamic process that continues to be influenced and shaped by communication and direct engagement in the improvement process. The shared beliefs, values, and assumptions about improvement are influenced by inconsistent versions of improvement, wavering leadership, a perceived or actual change in commitment, and other leadership behaviors, decisions, and actions. This in turn can change the behaviors of groups or individuals positively or negatively and the organization’s ultimate commitment to improvement. Constancy of purpose, effective communication strategies, and “walk the talk” best practices leadership behaviors are the best methods for dealing with introjection.
Identification
Identification is the cultural condition in which individuals seek to become an integral part of the larger group in terms of shared beliefs, values, and assumptions about improvement. Many of these associates are the “Show-me, I’m from Missouri” people in the organization. This is actually a favorable condition because it increases the attention to and desire to demonstrate success. Once they either experience or understand improvement, they jump on the train. Through this cultural condition, internalization occurs through the transformation of individuals, groups, and the organization, wholly or partially, after the role models of leadership and other champions of change. It is in this phase that the new personalities of individuals, groups, and the organization are formed. This is the phase where, with enough participation, cultural transformation is visible in the way associates think and work every day.
Incorporation
The final cultural condition of internalization is incorporation. This is the psychological and social ingestion of the philosophy of improvement as well as the systemized process of improvement. Incorporation is undeniably a cultural standard of excellence—in improvement strategy, deployment plans, values and code of conduct, individual behaviors, education, performance expectations, self-management, decisions and actions in associates’ own daily work, and their interactions with the entire organization. Cultural transformation is extremely visible in the way associates think and work and how they are intolerant of the mediocrity of those around them. Incorporation implies permanence in shared beliefs, values, and assumptions about improvement that are glued into culture— and that lead to the rhapsody level of continuous improvement. Remember that this is all a state in time; culture and adaptive systematic improvement as a whole require continuous renewal and nurturing to continue the positive evolution cycles.
Socialization: The Operating System of Internalization
Socialization is not a cultural condition in itself, but it is an important part of every cultural condition of internalization. Socialization is the ongoing transfer of information and nurturing of the organization’s mission, vision, shared beliefs, values, expectations, and standard code of conduct. The goal of socialization is to manage and minimize the disruptions of the various cultural states, to grease entry of internalization by whatever means necessary. Cultural evolution is simplified when executives have the full trust, loyalty, and commitment of their entire organization. Socialization helps to establish this unity of purpose between the organization and its associates, but it goes beyond communication. Socialization develops knowledge, skills, and personality characteristics within individuals so that they can function successfully within the broader context of the organization. This occurs through many directions: from leadership and/or organizational development to employees, from older employees to newer employees, exchanges between individuals in a department, exchanges between functional areas, from an experienced improvement resource to a new team, from a formal buddy or mentoring process, from interactions with champion employees, through a center of excellence in the company, and from many other directions.
These are common practices at Toyota for the past 75 years, and several U.S. organizations who really get it. For everyone else (the majority of U.S. organizations), you have invested nearly 30-50 years in Lean and other related CI initiatives and still have a long way to go. Culture is the missing link to true engagement, empowerment, human capital development, and autonomous self-management . . . Which are keys to superior and sustainable success.
Summary
Company culture is a critical success factor in Lean transformation initiatives, and digital transformation impacts three areas of opportunities, in their order of importance: people, process and technology. Remember that culture is a dynamic moving target established, nurtured, reinforced, and renewed by leadership. The outcome is directly proportional to how the dimensions and attributes of culture are defined and developed via leadership’s behaviors, choices, and actions.
Culture change is the deliberate leadership and positive influence of these deep seated, established standards that contribute to the organization’s behavioral stability. Culture change requires self-reinforcing repetitious affirmations through situational conditions (i.e.”Walk the talk”) where there exists natural resistant to change. As we mentioned earlier, the perception of change is highly influenced by past change experiences and outcomes. If executives and their organizations have been through a series of failed attempts at change, these experiences reinforce that change is not welcome.
Organizations with a weak continuous improvement culture will most likely struggle with larger business system transformation initiatives. Transformation and more holistic business systems approaches require much more than methodologies and tools, technology, and new equipment investments. People and culture still remain as the foundation for success. The answer is simple but not easy: Build a winning culture and achieve superior and sustainable success in planning, deployment, and execution of any and all major strategic, operational, or technology improvement initiatives. People and culture still remains as the core foundation for sustainable success.
Need help with executing successful change management to improve your lean transformation process? We do this for a living.
The Center for Excellence in Operations, Inc. (CEO) is engaged with many different clients every day, within a variety of industries, operating environments, and with different Lean/CI and cultural renewal challenges. We can get your Lean/CI initiatives back on track and operating at a much higher order, daily business system model level.
Contact one of the authors below. We will be happy to discuss your current situation and needs.
Terence T. Burton is President and Founder of The Center for Excellence in Operations, Inc. (CEO), a management consulting firm specializing in strategic and operational transformation. Terry has four decades of extensive operations and supply chain experience as a hands-on practitioner and executive in private industry, and has led consulting engagements in a wide spectrum of industries, having consulted with over 350 clients in 23 countries on their strategic and operations improvement initiatives. Terry can be reached directly at burton@ceobreakthrough.com
Edward A. Fagundes is the West Coast Practice Director for The Center for Excellence in Operations, Inc. (CEO), with emphasis on serving clients in the West Coast, United States region. Ed’s career spans various leadership roles in general management and as a global business system executive. He has proven expertise and extensive experience with improving business processes, developing lean transformation strategies and plans, leading the implementation of business improvement journeys to address business issues, and implementing enterprise-wide continuous improvement applications. Ed can be reached directly at edfagundes1@yahoo.com.
by Terry Burton | Blog, Uncategorized
LEAN STRAIGHT TALK SERIES #2
In the medical field there is Sutton’s Law which states that when diagnosing, one should first consider the obvious. It suggests that one should first conduct those tests which could confirm (or rule out) the most likely diagnosis. It is taught in medical schools to suggest to medical students that they might best order tests in that sequence which is most likely to result in a quick diagnosis, hence treatment, while minimizing unnecessary costs. The law is named after the bank robber Willie Sutton, who reputedly replied to a reporter’s inquiry as to why he robbed banks by saying “because that’s where the money is.”
So what does all of this have to do with Lean? If we apply the sale logical thinking, the money (e.g., largest opportunities) of Lean exist within the professional, knowledge-based transactional processes. Look at your P&L and Balance Sheet – It’s obvious! However, organizations spend the majority of their efforts in manufacturing. Willie Sutton would not approve of this type of Lean thinking. Our latest Lean Straight Talk Series post sheds new light on the rationale and urgent need to shift your Lean focus to the transactional processes.
Background
Traditionally lean has made great inroads of improvement in the manufacturing floor in taking waste out of processes and thus reducing lead-times and cost. However, Lean as widely practiced has failed to recognize where the most significant root causes, detractors, and constraints of operating performance exist from a total business perspective. Here are a few facts to ponder:
- The majority of root causes of manufacturing issues occur up front in the transactional process space of the organization. The operating issues and their associated wastes in sales and marketing, forecasting and demand management/SIOP, capacity and resource planning, new product development, detailed product/process design, supply chain management, quality management, program and project management, field reliability, etc. are the primary drivers of manufacturing wastes. It’s too late to deal with these issues in manufacturing, it’s a much better operations strategy to predict and prevent these issues in the first place.
- As the transactional content in processes increases, so too does the complexity of improvement. The concept of process has rapidly morphed away from hard assets to knowledge-based transactional processes with a high degree of professional, technology, and human content. Transactional process improvement in the global enterprise network, and the improvement kata behaviors and cultural attributes to harvest these magnificent opportunities are yet to be mastered by most organizations. Furthermore, many organizations do not understand how to approach and adapt Lean, and reel in these incredible breakthrough improvements in operating and business performance.
- Most of the transactional process opportunities are hidden, unknown, undisclosed, or undiscovered. Because they are unknown, nobody understands the magnitude of impact and opportunities for improvement of the business without further mining and assessment. Many organizations are puzzled about where and how to begin this new focus of strategic improvement. Make no mistake about it – These are the largest untapped opportunities for improvement.
- In many situations, the diminishing returns of Lean manufacturing is a dwarf to the enormous, undiscovered opportunities in the global transactional process space. Harvesting these new opportunities requires an evolution to an enterprise-wide, organization-centric and culturally grounded Lean Business System . . . a for real, holistic Lean Business System that simultaneously develops new and higher order improvement talent, and nurtures the right aligned behaviors and cultural attributes of a great improvement kata.
These trends are pretty obvious (like Sutton’s Law). So . . . What is preventing many organizations from capitalizing on their transactional opportunities? The majority of organizations have not deployed Lean strategically using a total business system approach. Sure many organizations claim to have their “XYZ Business System” but it is in name only. It really isn’t a total business system approach at all. A true business system approach evolves enterprise-wide to new customer and market needs, adapts rapidly to a higher order of operating requirements.
New Challenges Of Transactional Improvement
Beyond the missing business system model, adapting Lean to the professional, knowledge-based transactional space is extremely complicated and requires creative thinking. Complex transactional processes include a lot of unpredictability, professional judgments vs. hard data, a high degree of informal activities underlying a formal process, and fuzzy cause-and-effects in space and time. Many of these types of challenges have the presence of reflexivity – circular relationships, interaction properties, and interconnectivity between causes and effects. In essence, causes and effects are multidirectional and affect one another, so neither can be easily assigned as causes or effects. Furthermore, causes and effects are relative at any moment.
These are very real challenges in the complex interconnected network of professional, technology-enabled, and knowledge-based transactional processes. Transactional processes are much more complicated because of their interconnected, convoluted, and cross-enterprise scope, lack of standardization, unsighted (invisible) transaction magnitude and velocity, and of course the human element of originality and workarounds in daily operations. You simply can’t get at these hidden opportunities by doing the same things, same approaches, same thinking as Lean Manufacturing.
In order to move Lean beyond the factory floor organizations expand their notion of process to include the enterprise-wide, interconnected network of transactional activities that contribute significantly to the customer experience. Lean on the factory floor is a diminishing proposition when compared to the larger digital transformation and operating model innovation possibilities. The Gemba is now the total business enterprise, the whole business of delivering unmatched customer value and loyalty. Lean manufacturing is still important, but a relatively small piece of the Gemba.
How To Achieve Transactional Process Improvement Successes
Today, a very high percentage of Lean/CI initiatives are not meeting leadership’s expectations. A major reason is the failure to capitalize on transactional process improvement opportunities. The content, cost, and relative influence of internal operations has shifted to knowledge-based transactional processes, yet many Lean/CI initiatives have remained focused on the production floor for decades.
How does an organization step up, expand their Lean horizons, and achieve new breakthroughs in operating results? The following steps are helpful in shifting focus to the transactional process improvement space:
- Understand the complex nature and importance of transactional business processes. The operating environments in organizations have changed faster than the capacity and capabilities of their resources to improve it. Success is highly dependent upon a paradigm shift to nimble and efficient strategy and opportunity alignment processes, supply chain processes, time-to-market processes, cash-to-cash processes, engineering processes, customer service processes, sales and marketing processes, and many other “people plus technology” processes in organizations. This requires a large, enterprise-wide leadership commitment to pursue and harvest these new opportunities.
- Learn how to adapt Lean to transactional process opportunities. This is easier said than done and requires new thinking and new talent. The word adapt is important – Simply attempting to port over Lean manufacturing tools and methodologies is dead wrong. Understanding how to adapt Lean to transactional processes requires a deep understanding of the interconnected business systems architecture (e.g., supply chain processes, time-to-market processes, cash-to-cash processes, engineering processes, customer service processes, sales and marketing processes, and many other “people plus technology architecture” processes in organizations). It also requires creativity, innovation, and measurement system design competencies (many of the underlying transactional details have never been analyzed or measured relative to improvement).
- Realign Lean as a higher order business system approach to strategic improvement. There are many critical elements of a true Lean or XYZ Company Business System. Organizations need to stop the generic Lean broadcasting and mimicking each other’s Lean Manufacturing/TPS initiatives and return to the basics of what they must accomplish (Jobs To Be Done). We have developed a Lean Business System Reference Model which helps clients to architect their own business system model based on their own operating requirements and cultural development needs – In their own way!
- Conduct a detailed assessment of current transactional process conditions. This assessment requires special skills far beyond Lean manufacturing. The seasoned transactional improvement expert uses the organization’s integrated enterprise architecture and other applications to trace and defrag the transaction trail like a forensic detective reconstructing and processing a crime scene to identify wastes and root causes. In practice, the differences between root causes and outcomes is often fuzzy. The challenge becomes one of identifying and isolating the right pain point segments of these transactional processes with real facts. Transactional forensics is a very appropriate name for this approach to Lean and transactional process improvement. It involves setting up deliberate process experiments for transactional stream mapping and classification to either discover the deep root causes and magnitudes of problems, and/or to verify that problems have been eliminated through the right data-driven improvements and corrective actions. In most cases, what was perceived to be the problem is not the problem at all. It is something different, often several interdependent multiple root cause and effect issues buried in the complex transactional network. Solving this puzzle is what creates the breakthrough magnitude of improvements in organizations.
- Identify major transactional process improvements that will generate breakthroughs in operating performance. Again, this is a very laser targeted approach to strategic improvement. There are hundreds of transactional improvement opportunities in every organization and the key to prioritization is Sutton’s Law. The challenge is that obvious is not so obvious to the inexperienced and uninitiated practitioner. Engage the right outside resources and increase your odds for success. One benefit of transactional improvement is that it is interconnected: The right improvement initiatives executed successfully produce both direct and interactive benefits throughout the transactional process network. Be careful, the opposite is also true especially if the proposed improvement is limited, localized, and silo-based.
- Integrate transactional process improvement and digital technology. When we hear the word digital transformation, it usually refers to breakthroughs in transactional processes using technology. The greatest improvements are not incremental. They result from innovative thinking and initiatives that will WOW customers. Leading organizations in this area develop Lighthouse Pilots to test and validate totally different and more innovative operating models, integrating end-to-end business processes and the right digitization technologies. Business improvement plus enabling technology is a powerful force. Unfortunately the two have been at odds for decades. It’s time to get it right.
Summary – Results Realized
The need and benefits of transactional process improvement are very compelling and very real. If you don’t believe us then go look at your costs of obsolete inventory, returns and allowances, new product development, customer service, warranty and repairs, inventory write downs, inefficient supply chains, long and inefficient cash-to-cash cycles, and many other indirect hidden costs.
Transactional process improvement represents hundreds of millions of dollars in new value contribution for many organizations. Think about the short term P&L impact and the longer term competitiveness of reducing returns and allowances by $30M; improving speed-to-market by 80%; adding 3 gross margin points to the P&L through less planned financial reserves; reducing supply chain time, complexity, and costs by $100M; the hundreds of millions of revenue growth, cost reduction, profitability, and competitive market position from developing new products on time, on budget, without post release quality, reliability, or performance issues; reducing the financial close and all related G/L clerical adjustments by 75%; reducing engineering changes by 50%; hitting new product features/functions out of the park; reducing the need for professionals to travel internationally to put out fires; improving advertising and promotion effectiveness by 100%; reducing operating supplies and facility costs by $10M.
These examples are actual transactional process improvements achieved in our client organizations. Professional, knowledge-based transactional processes are the new goldmine for Lean.
Need help? We do this for a living.
The Center for Excellence in Operations, Inc. (CEO) is engaged with many different clients every day, within a variety of industries, operating environments, and with different Lean/CI and cultural renewal challenges. We can get your Lean/CI initiatives back on track and operating at a much higher order, daily business system model level.
Contact one of the authors below. We will be happy to discuss your current situation and needs.
Terence T. Burton is President and Founder of The Center for Excellence in Operations, Inc. (CEO), a management consulting firm specializing in strategic and operational transformation. Terry has four decades of extensive operations and supply chain experience as a hands-on practitioner and executive in private industry, and has led consulting engagements in a wide spectrum of industries, having consulted with over 350 clients in 23 countries on their strategic and operations improvement initiatives. Terry can be reached directly at burton@ceobreakthrough.com
Edward A. Fagundes is the West Coast Practice Director for The Center for Excellence in Operations, Inc. (CEO), with emphasis on serving clients in the West Coast, United States region. Ed’s career spans various leadership roles in general management and as a global business system executive. He has proven expertise and extensive experience with improving business processes, developing lean transformation strategies and plans, leading the implementation of business improvement journeys to address business issues, and implementing enterprise-wide continuous improvement applications. Ed can be reached directly at edfagundes1@yahoo.com.
by Terry Burton | Blog, Uncategorized
LEAN STRAIGHT TALK SERIES #1
What is the current status of your Lean/CI initiatives? It might be helpful to think about the answer to this question in terms of a simple normal curve. The majority of organizations are in the middle, having achieved mixed successes but are struggling and trying to figure out how they evolve these initial successes to a higher level of sustainable results. There’s a small group of very successful Lean/CI organizations to the left, and a small group to the right who have either abandoned or are failing miserably with Lean/CI. But let’s be candid with the current dilemma of Lean/CI in most organizations. Many corporate Lean/CI initiatives have been on the decline for the past decade. There’s a good chance that you are one of these organizations.
What happened? Most organizations experienced early successes applying Lean/CI to their low hanging fruit opportunities. Today the low hanging fruit has dried up as the world is full of many more complex operating issues. Lean/CI initiatives have not evolved with the times. In far too many organizations, leadership and people are blindly and deeply rooted into their daily accepted Lean routines, TPS improvements, symbolic storyboards and beautification exercises, Shingo lingo, GEMBA walks and KATA sonatas, and refuse to change course. Other organizations are grossly overloaded, exhausted, and more disengaged with formal CI initiatives and seem to continue on to other more pressing firefighting issues of the moment. Wow, these are bold statements, but the true fact is leaders and their organizations continue to struggle with this decline in Lean and strategic improvement in general.
Today the low hanging fruit has dried up as the world is full of many more complex operating issues. Lean/CI initiatives have not evolved with the times.
Background
A very high percentage of Lean/CI initiatives are not meeting leadership’s expectations. This dilemma is centered around challenges with creative and adaptive leadership, organizational commitment and full engagement, continuous talent development, and constantly focusing on the right things to produce the right desired results. In the absence of these key success factors, organizations are both uncomfortable and politically reluctant to think outside of their dominant Lean/CI operating model. Instead they focus too much on the accepted (and expected) process and mechanics of their current model, and not enough on evolving customer requirements and operating model innovation. Think about this – The world changes rapidly, yet many Lean/CI initiatives have remained the same for decades.
To achieve greater operating results with Lean and strategic improvement, executives must first:
- Step back and acknowledge the victories and shortfalls of their current initiatives;
- Recognize the gaps between their current situation and where they need to go to achieve new breakthrough opportunities for improvement;
- Develop a renewed and detailed approach that re-points their Lean/CI planning, deployment, and execution approach for greater success;
- Connect Lean/CI directly to the annual business plan and align daily execution activities to achieve the right desired results;
- Create a more real time, closed-loop performance management system to proactively reset the right priorities, gauge ongoing progress, and make the necessary course corrections for continuous success.
Most organizations fail to evolve, discover, and invent the full potential of their future Lean/CI initiatives. This dilemma can be either a permanent problem or a temporary bump in the road in the grander philosophy and correct practice of continuous improvement. The difference between the two is a leadership choice. The “larger process” of how we improve how we improve must always keep pace with ever evolving customer and market needs, changing business requirements, and cultural/talent development essentials.
Symptoms of Lean/CI Underperformance
Candor is a prerequisite to change leadership. If you’re serious about turning your present Lean/CI underperformance around, you can’t pretend that mediocre performance is great performance. Here are a few common observations to confirm the frustrating challenges of Lean/CI initiatives in most organizations. These conditions detract from evolving Lean/CI to a higher order business system of strategic improvement.
Creative change leadership is weak.
The leadership of major change is often hasty and impatient, where the focus is more on steering and rolling out the identical program content across the organization and across different business units. More importance is placed on adherence to the standard program and making sure that everyone is visibly replicating the same activities. Less importance is placed on creatively adapting the concepts to the right critical business challenges and developing people’s competencies to think and practice creative problem solving. Hence, Lean/CI fails to stick as the cultural standard of excellence. Sustainable success involves much more than following the standard protocol of Lean/CI methodologies, tools, storyboards, and templates.
Lack of adapting and aligning Lean/CI to critical business requirements and cultural development needs.
We visit with many organizations and have active dialogues on LinkedIn and other social media sites. What do you see? There’s a lot of people talking the theory, methodologies and tools of a Lean Business System and following the right perceived recipes for success. Others are reading about and quickly attempting to mimic Toyota and other Lean/CI organizations. “It’s all great stuff and we gotta do this,” right? The result is a complex “swamp” of everyone running with their own perceived and accepted Lean/CI approach while totally missing and skipping the notion and tough work of architecting and deploying a true business systems approach to strategic improvement “in your own way. Hence, Lean/CI is misunderstood, misguided, confusing, and often a part-time effort to the organization.
Reluctance to change the strategy and approach to Lean/CI that has been in place for years.
There is no place for politics, emotions, debates about various methodologies, blindly following established and/or accepted routines, or hanging on to old habits in continuous improvement. The politics of doing Lean/CI and following the established religion du jour is very real in organizations. People do not want to stop or criticize things and make waves so they keep the process that isn’t working going. So they engage in Lean/CI created activity – Activities that follow the expected protocol and are perceived as value-adding but are really additional wastes. This visible going through the motions keeps everyone happy but achieves mediocre results and cultural acceptance.
Operating strategy does not include constancy of purpose.
Over time, many organizations experience leadership changes, restarts, different directives, and a totally confused organization. This is reality, not excuses . . . But recognize that it all happens and takes your Lean and strategic improvement initiatives off the tracks. Constancy of purpose is a timeless best practice to continuously reset, communicate, reinforce, and reaffirm Lean/CI leadership when these other natural changes occur. Constancy of purpose is the continuous casualty in favor of short-term performance.
Lean/CI is managed as a static improvement process instead of a broader, true business system.
Customer expectations, business requirements, cultural development needs, and the manufacturing vs. knowledge work content changes over time. Yet many organizations are deeply rooted in deploying Lean/CI in the production area with methodologies that have not changed with the times. This creates Lean/CI complacency, or just going through the motions and expecting greater and greater results. The organization’s Business System is symbolic and exists in name only.
Lean/CI is too focused on production.
Manufacturing is the easiest environment to apply Lean/CI, but it is beginning to have a lesser impact on the business. The largest opportunities in organizations exist in the integrated network of professional, knowledge-based transactional processes. These processes are full of hidden, unknown, undisclosed, and undiscovered opportunities for improvement. Examples include digitization, sales and marketing, program management, supply chain management and procurement, engineering and new product development, integrated product and process design, customer service, quality and compliance management, human resource management, talent development, and the like. Decisions made in these areas are often irreversible in terms of operating issues in manufacturing. Adapting Lean/CI to these complex knowledge processes requires much deeper forensics experience and are often avoided/excluded from an organization’s business system approach to improvement.
So the big question – Do you want to remain in the stalled majority, or do you want to turn things around? It takes bold leadership that objectively acknowledges the positives and detractors of current conditions, recognizes the need to do something different and better, and is open to a renewed implementation approach. The answer is simple but not easy. In fact, turning a declining Lean/CI initiative around is extremely complex from a change leadership, integrated business system, and renewed cultural perspective.
How to Rethink, Redefine, Realign, and Redeploy the Journey
Face it – The majority of organizations are not getting results they are entitled to with Lean and strategic improvement. You’re not alone, the majority of organizations are here. It’s only bad if you don’t do something about your situation. Continuing to follow your existing Lean/CI model and expecting different results is not the answer. Continuing to superficially mimic Toyota and the stalled activities of other organizations is not the answer. You can change this. As we mentioned earlier, it is first and foremost a leadership choice. If organizations wish to achieve greater results (that they deserve and are entitled to), the executive team must be willing to step back and rethink, redefine, realign, and redeploy their journey.
This is easier said than done and implemented. This requires leadership and technical interventions, and injections of new thinking/talent to get back on the right track. Since many organizations have been stuck in this decline mode for a while, the best approach is to engage outside expertise with the knowledge, experience, and proven track record of turning your situation around.
Below is our real world, common sense guidance for rethinking, redefining, realigning, and redeploying your Lean/CI journey.
- Acknowledge and accept that you’re not getting what you expected or need to achieve from your Lean and CI initiatives. Forget about politics, debates on methodologies, established or currently accepted routines, the mechanics of Lean/CI, etc. Stop doing the same things and expecting different results. Put the keys down, and rethink your journey – in your own way.
- Recognize the need to do something different. More of the same is not working. Mimicking what others are doing is not working. Success is more than going through the standard routines. Admit that your organization needs help and new thinking to evolve to a higher order of Lean/CI. It is much more difficult to achieve success in your own way.
- Conduct an objective assessment of current Lean/CI conditions. This is a detailed diagnostic of your present model initiatives, operating gaps, and missed opportunities. This detailed task will help reveal the gaps that need review and correction to realign with business objectives.
- Seek help from industry recognized experts. Resetting involves defining the customer experience, and clarifying business improvement and cultural development requirements to achieve renewed customer, financial, and operating success. The right outside expertise can provide both accelerated confirmation and guidance for new opportunities.
- Create a compelling and renewed vision and reason why and how your organization needs to adapt Lean/CI to your business. Lean/CI must be viewed as the accepted enabling initiatives to achieve business plan and personal success. This step must provide a compelling reason for rethinking, redefining, realigning, and redeploying your journey as an evolutionary step to improved competitiveness and greater operating success.
- Develop the renewed Lean/CI road map. This is a clear implementation plan to chart and align a new Lean/CI course to changing customer, market, business, and talent requirements. This renewed approach includes the development of new critical core competencies such as digital technologies.
- Re-evaluate and reset the organization’s commitment. Commitment includes the competencies, capabilities, and resources to fully support the Lean/CI road map as a way of life. Commitment is not a short term token agreement.
- Educate the executive team, managers, process owners, and associates. This is not a train-the-masses exercise but a reinforcement of Lean/CI as a formal business system, reaffirmation of expectations for success, and consequences of poor performance. Adaptive and customized reinforcement education specific to your business system problem-solving needs is critical to success.
- Strengthen the organization’s communication, awareness, and reinforcement best practices. Purpose-Driven Communication assures that Lean/CI initiatives have been clarified, accepted, and realigned for the success. Use different communication protocols to engage and reach different people in the organization. Showcase successes and recognize teams/individuals for the right accomplishments.
- Execute the renewed deployment and execution plan. Prioritize on the highest impact opportunities in the business plan. Success is not demonstrating all the Lean methodologies and practices known to mankind, but establishing the business system model for solving the right problems with the right approaches to achieve the right desired results – Over and over again.
- Establish a Daily/Weekly/Monthly/Annual Leader Standard Work Framework to Measure Continuous Success. Conduct frequent reviews of Lean/CI responsibilities and results vs. business requirements and cultural development needs. Build a closed loop performance management system with the right aligned metrics and reinforce teams and individuals for great performance. Make the necessary course corrections to achieve continued, sustainable successes.
- Build a Strong Problem Solving Culture. Assure that your organization is framed around creating a culture of no fear and creative problem-solving. This competency drives the right approaches to Lean/CI. Going through the motions and hoping for results very common, but is not the right approach. Breakthrough success is more about building the right attitudes, behaviors, choices, and actions than it is about following the standard recipe of methodologies and tools.
Summary
It’s not the end of the world if your Lean/CI initiative has stalled out, declining, or is struggling to deliver true value to the organization . . . As long as you recognize and acknowledge this condition and the need to do something different to achieve different greater results. Easier said than done – Change can be difficult, especially for the internal Lean/CI resources.
Lean/CI has become a commoditized approach to improvement. If everyone is reading the same books, listening to the same consulting advice, using the same methodologies and tools on the same issues, there is no competitive advantage. Lean/CI has become a maintenance activity rather than a means of delivering the greatest customer experience and achieving superior operating performance.
You can’t do what everyone else is doing and expect superior results. We refer to this as the Lean Groundhog Dilemma: If you come out and observe a flurry of Lean/CI activities, then success must be on the way soon. The answers are not in copying some other organization’s way – It’s not your way, and many of the most critical success factors (e.g., leadership, strategy, culture, organizational dynamics, customer centricity, scalability, human capital, etc. ) are invisible and cannot be copied. It’s time to stop the variations on the same themes, and realign with an ever changing world with very different expectations of strategic and operational improvement.
Need help? We do this for a living.
The Center for Excellence in Operations, Inc. (CEO) is engaged with many different clients every day, within a variety of industries, operating environments, and with different Lean/CI and cultural renewal challenges. We can get your Lean/CI initiatives back on track and operating at a much higher order, daily business system model level.
Contact one of the authors below. We will be happy to discuss your current situation and needs.
Terence T. Burton is President and Founder of The Center for Excellence in Operations, Inc. (CEO), a management consulting firm specializing in strategic and operational transformation. Terry has four decades of extensive operations and supply chain experience as a hands-on practitioner and executive in private industry, and has led consulting engagements in a wide spectrum of industries, having consulted with over 350 clients in 23 countries on their strategic and operations improvement initiatives. Terry can be reached directly at burton@ceobreakthrough.com
Edward A. Fagundes is the West Coast Practice Director for The Center for Excellence in Operations, Inc. (CEO), with emphasis on serving clients in the West Coast, United States region. Ed’s career spans various leadership roles in general management and as a global business system executive. He has proven expertise and extensive experience with improving business processes, developing lean transformation strategies and plans, leading the implementation of business improvement journeys to address business issues, and implementing enterprise-wide continuous improvement applications. Ed can be reached directly at edfagundes1@yahoo.com.
Company culture is a critical success factor in Lean transformation initiatives, and digital transformation impacts three areas of opportunities, in their order of importance: people, process and technology. Remember that culture is a dynamic moving target established, nurtured, reinforced, and renewed by leadership. The outcome is directly proportional to how the dimensions and attributes of culture are defined and developed via leadership’s behaviors, choices, and actions.
