Gemba walks will never be the same after watching this video.
Gemba walks will never be the same after watching this video.
If you search for Change Management across the interwebs, you’ll get all kinds of results, much of it focused on understanding and coaching a person through the psychological process that change creates. You know the one that goes from excitement, to denial, then the pit of despair, then acceptance, and finally growth. I know…sounds a bit dramatic – and rightfully so. When you make a change, do you consider the risk and implications across all affected functions of the business? As your Lean Manufacturing or Continuous Improvement teams work to increase quality, productivity, and service levels, are they effectively managing change in a way that enables growth while sustaining the base? Surely there are some aspects of the process that are good and should be sustained, right? This article explores the concept of Change Management as a Continuous Improvement tool and how this critical skill-set creates a distinct competitive advantage for any business.
Change Management is a systematic approach to driving proactive risk identification and mitigation for changes, and then ensuring the effective close-out of change initiatives. The objective of change is usually to improve some aspect of the business, which is good. The challenge is that in some improvement efforts, the consequences can be pushed to another area of function of the business and not discovered until it’s too late. For example, modifying a filling machine to increase productivity could also cause poor quality or safety if the risks aren’t effectively identified and mitigated in advance of making the change. Change Management helps to make changes more likely to succeed without disrupting other key areas of performance.
I’ll start by giving you three excellent reasons you should be investing in Change Management capability:
1) Change is inevitable – its either happening for you or to you
2) The pace of change is increasing – more disruptions in less time
3) Those who are best at it will win the future
You’ll find little talk about Change Management in most Lean books or sources of CI information. Many of the creators and early observers of Lean Manufacturing learned from Toyota, which is primarily a car manufacturer. The automotive industry is a manufacturer-driven where the car maker has a lot of control over what gets produced and sold. In this environment, the manufacturer has more control over the pace of change and there just aren’t as many major disruptions. Within the plant, as the vehicle moves from station to station, the operator completes a defined sequence of process steps, making it easier to stabilize production flow and establish true equipment and process ownership. When a new body-style is released every few years, there may be new equipment or retooling changes. The capital project orientation of Early Management (EM) is more than sufficient in this environment.
In other, more market-driven industries, change is more frequent and often more dramatic. The principles of EM apply but the tools aren’t very applicable for non-capital changes such as people, processes, and, in some cases, products. For example, in many CPG companies, there are several new products launched every year, requiring significant changes across the organization. Additionally, operators may be responsible for a series of equipment that produces a variety of products that can change regularly. The level of true process and equipment ownership is more difficult to establish than in other manufacturing environments. It’s a much more fluid dynamic and requires a more comprehensive approach to Change Management. Otherwise risks spiral out of control, which can be a major liability for consumable goods like food, for example.
The objective of Change Management is to successfully execute changes more quickly without compromising or taking losses in other key areas of the business. The idea is to achieve and sustain the desired steady state in less time, cost, and overall less resources consumed. To do this, you’d need to drive more proactive risk assessment and mitigation for changes. This includes risks across all affected functions including safety, quality, production, cost, service levels and even morale. A best-in-class Change Management process have the following 5 phases:
Phase 1) Leadership Review – Leadership filters changes and assigns resources needed for successful execution
Phase 2) Risk Mitigation – Change Owners (single point of accountability) assess and mitigate associated risks
Phase 3) Leadership Alignment – Leadership verifies that all critical risks have been mitigated
Phase 4) Change Execution – The change is implemented, teams are trained, communication is completed, and key learnings are captured
Phase 5) Close-out – Leadership verifies satisfactory completion of the items in Phase 4
This simple process is scaleable to be effective from the production line up to the enterprise level. Lean Manufacturing and Continuous Improvement initiatives inflict an incredible amount of change on an organization. The importance of the critical skill-set of Change Management is highlighted by the fact that over 70% of Lean initiatives fail to sustain. Market and process-driven companies especially face a unique set of challenges that require more frequent and severe changes in just about every aspect of the business than more discreet manufacturers such as auto-makers. As a result, it’s imperative to effectively execute and close-out changes because there are always several others coming through the pipeline.
Well if a journey of a thousand miles begins with one step…and a Lean transformation is a journey; then when do we get to celebrate? I think that’s what everybody’s really wondering. As with any journey, you can take the long, hard, and treacherous path, or the one that’s lined with beautiful flowers and breathtaking landscapes. Well I can promise you one thing, if you chose the former path, not everyone is going to make it – and that sucks – because it doesn’t have to be that way.
A Lean journey is full of everyday small wins. For the same reasons we all ran out and got Facebook accounts and get so excited when pictures of the baby gets a million likes, those everyday small wins have an immensely powerful effect on our motivation and desire to take action. These small wins are vital assets for leaders to keep people engaged in the journey and motivated to keep going in the right direction; so its crucial that leaders handle them effectively. The challenge for you as a leader is knowing that a small win, or success story, has been achieved; when it is achieved. A small win might include an operator setting a personal best in line efficiency, a team setting a downtime reduction record, achieving a target condition, or other. Tracking OEE is a great starting point – but if you’re still using a manual OEE tracking process (ie whiteboards or paper), you can forget about capturing personal bests by employee or team. Also, mostly all software platforms, with the exception of impruver.com, tracks OEE by line but not the individual, and thus can’t assign a personal best – to the person. As a leader, one of the most demotivating things you can do is fail to recognize and reward the right behaviors at the right time. Sometimes your people know when they’ve set a personal record but they expect you, as a leader, to know as well – without them having to tell you. Its almost like forgetting your kid’s birthday – and if you did that too, you aught to be ashamed.
Think about this from the line operators perspective. In the absence of any other indicator, the only way to define success is by producing more product that ever before, which may actually be harmful if you’re overproducing; or at least completing the schedule on time, which just means you’re not getting worse. Additionally, these events come too few and far in between to motivate you to strive for everyday improvement. You really don’t have an incentive to “do better everyday”, which is at the heart of Continuous Improvement. You just want to clock in, do good enough, get paid, and go home.
If you think about it in the context of a CI journey, those small wins are like winning basketball games in route to the championship. In order to build “championship-level” confidence, you have to win a lot of games throughout the season. Setting a personal best in yield losses today, changeover time tomorrow, and then line uptime the next day gives you the motivation to set new personal bests going forward. Couple this with a social element of automatically broadcasting these success stories throughout the company and you’ve got a recipe for rapid growth. Imagine you just finish a successful kaizen event and set a personal best in rate attainment the next day, then received a “like” or comment from the CEO and other leaders recognizing your achievement. That’s an incredibly powerful motivator to engage in more improvement activity on your line. You’d come to work everyday knowing that a new personal best is well within reach; excited about trying out that new idea to see what impact it has on results. You’d stick around while maintenance is repairing the line so you can learn how to make those repairs yourself – so you don’t have to wait around for maintenance next time. You’d be asking your supervisor or CI resource about new Lean Tools and methods you could use to get better results. This approach creates “pull” from the shop floor for CI as opposed to having it pushed upon you by management against your will or interest.
You might be thinking about all the impossible daily number crunching that would be required to get this done. Or if you’re using spreadsheets, this file could become incredibly large and useless and inaccurate in no time. And speaking of time, it would take an incredible amount of time to build, update, and maintain such a tool. But don’t fret. This technology already exists and is ready for you to use to accelerate your CI journey. When the geniuses at Toyota and their observers wrote the books on Lean, the tech unfortunately did not exist. In fact, Toyota had an aversion to the use of technology in their Management System (TPS) because they feared it would automate too much and allow the operator to disengage. They’ve since changed their approach as they saw their competitors leveraging various technologies to great effect. We’re learning everyday that Toyota wasn’t right about everything; but you can get it right.
Check out this video to see what I’m talking about:
So.. never again should an operator go a day without their leaders even being aware that they just had the best day ever. Take the scenic route – engage your people in everyday small wins and watch the powerful impact it has on your Lean culture.
Command-and-Control organizations are built around principles of efficiency, speed, and execution. On the surface, these sound like good qualities of a Lean organization as well. After all, Lean is all about eliminating waste, right? It makes sense that once leaders figure out what activities constitute wastefulness, they could simply command all employees to stop doing those behaviors and start doing things that management deems to be more efficient. And that those who fail to comply should be “coached” into compliance. However, subscribing to this way of thinking transfers power to managers and away from their subordinates, who perform the value-added work that the customer is paying for. And with that power transfer goes creativity, innovation, motivation, and all other things that are needed to create a thriving culture of Continuous Improvement. To restate the question: Can Command-and-Control and a Culture of Continuous Improvement Coexist? The short answer to this question is no. The long answer is – its complicated, but no.
In essence, Command-and-Control is the kryptonite of Continuous Improvement. It values doing things right over doing the right things, conformance over creativity, and efficiency over effectiveness. It siphons power from the bottom and feeds it up to the top. It drives behavior through fear and manipulation instead of genuine desire to do good. It is founded on a few assumptions, one being that the manager knows best what needs to be done and others should be subordinated. It views the organizational relationships as authoritative and not collaborative. The purpose of Lean is to continuously increase value to the customer. Value is created on the value stream; so logically, the people closest to, or working on, the value stream have the best understanding of opportunities for improvement. While a manager may have a more macro (high level) point of view over the end to end business system, the people who live with value stream issues day in and day out are probably going to understand the issues at a deeper level; thus, putting them in position to develop more optimal solutions for their area of ownership. Although leaders are in a better position to drive system-level improvements, in a Command-and-Control culture, many of them are too busy micromanaging their employees to step back and look at the system. Leaders and their teams should work as partners to optimize the business with the intent to bring the greatest possible value to the customer.
Another assumption in a Command-and-Control culture is that the manager’s role is to enforce the rules and employee performance is an assessment of compliance. Those leaders who are trying to instill a Continuous Improvement culture using command-and-control tactics are operating as if creativity and innovation are a privilege of upper leadership and all others should simply obey. In this environment, subordinates display obedience out of fear – with the hopes that one day, they’ll be rewarded with the authority to create an innovate, or actually use the right half of their brains at work; or just keep their jobs for a little while longer.
In contrast, the aim of Continuous Improvement is to accelerate a company towards its objective, which is ultimately to win in the markets they serve. This usually means keeping customers and other stakeholders happy. This cannot be done without considering the competitive landscape in which the company operates. In order to win in the market, your company must have 2 things going for it: 1) be more in-tune with the market and the customer’s perception of value and 2) be able to change to better meet the needs of the customer.
The challenge is that corporate managers, especially as they ascend higher up in to the organization, become more and more detached from the value stream – making Command-and-Control more convenient for the leader but less optimal for everyone else, including the customer. Instead, companies should seek to more directly connect those doing the work on the value stream to the consumer. Then empower them to innovate to better meet the needs of the customer.
Imagine 2 scenarios:
Which one do you think has the strongest competitive advantage?
In the latter scenario, shop floor operators are effectively rendered dependent on their managers for guidance, who often also have no clue which direction the market is moving, especially if there isn’t an effectively strategy deployment process in place. To take the former scenario a step further, imagine shop floor leads and operators engaging directly with customers to brainstorm ideas for improvement. This would require an incredible shift in power to the people working the value stream – and for leaders to become support resources, coaches, and facilitators – as opposed to commanders.
This is an especially difficult challenge large companies who likely compete on efficiency. They tend to identify products that can be sold to the masses and then build the business machine to produce these things cheaply and in large quantities. They are not designed to be flexible to the needs of the market but to be great at making a thing and controlling the market through pricing, messaging, and other incentives. For a business built on this model, efficiency is king. These are not playgrounds for the creative and innovative, but more like a platoon of highly disciplined troops, whose slightest display of disobedience could mean life and death for the entire troop, and possibly the loss of the war itself. These companies are not good at capitalizing on opportunities, but at protecting the status quo and position that they have enjoyed for so long. Often these companies are being cannibalized by their own size and slowness, making a Continuous Improvement a struggle to grasp and sustain.
In a CI culture, empowerment of the people is paramount. Empowerment requires leaders to relinquish some of their own power to engage their teams to a higher order. This means employees at all levels get to bring both halves of their brains to work everyday and put them to good use for the company. An organization where only leaders are allowed to practice creativity and experimentation is inherently going to make much slower progress than one where all employees are fully engaged to create, initiate, and innovate. In competitive markets, companies that are both in-tune with customer needs and capable of rapid innovation will dominate in terms of growth and talent acquisition. Those that promote leaders based on strict obedience will perpetuate a cycle of stagnation, slow growth, and ultimate demise.
There are over 1,000 Lean tools and counting that can be used to improve processes and help a business become more Lean. All of them have a time and place but you can achieve remarkable success by doing just a small handful of things really well. So put away your stack of Lean books and close the 90 web pages showering you with overkill Continuous Improvement advice. This article will provide you a simple formula that will help you develop an unstoppable Lean Culture.
Element #1) Strategy Deployment
You need to be clear on what will help the company win in the market. The few things that will generate the greatest success for your company, is your strategy. Then you need a seamless method for deploying these priorities throughout the organization. Your deployment method must leave no employee behind. This means each and every person working in your company needs to understand their role in delivering the strategy and commit to clearly defined improvement objectives for their area of ownership. Each person should establish a target condition that is an improvement on the current condition. This becomes their Continuous Improvement plan – all of which should clearly connect up to the highest ranking leader’s plan. Remember that making progress against your strategy is the very definition of improvement. Any side steps, aka random changes, are a waste of precious resources.
Element #2) A Mechanism for Improving
You need to develop the skill of everyone in your company to make sustainable improvements. The de-facto method for this is called PDCA or Plan-Do-Check-Act. You’re probably familiar with this term or one of it’s many variants. Essentially it’s just a spin off of using the scientific method to discover the truth about your business processes and make changes that work. The only way to do this is good old fashioned trial and error. You form a hypothesis about what will get you better results, you test it, you observe the outcome, then you repeat this process until you discover the truth. This isn’t breakthrough thinking, but in practice, it usually falls apart in the testing and / or repeat as needed phase. The best way to form a hypothesis is to work with a cross-functional team of people close to the process to do a Root Cause Analysis. This gets you to the right answer with less time and effort invested. Just remember that the output of a RCA is just hypothesis that needs to be proven by making changes to the process. The key here is to be deliberate about driving action based on analysis. You need a good way to ensure actions are being executed so you can know from experience what’s really driving process results.
Element #3) Performance Measurement Tools
Without a good way of quantifying performance, you have no idea if you’re actually improving or sustaining results. You’ve probably heard the expression “go with your gut”, but in this case, don’t! You need the numbers. Which numbers you use will vary based on what you’re trying to improve. When it comes to manufacturing value stream execution, you have to go with OEE, or Overall Equipment Effectiveness. OEE is global gold standard. As you experiment with making changes to processes, you need to watch and see what happens to the performance metrics. When you’re really getting to the truth, you can use it to lever the numbers up or down by making the right changes.
Element #4) Leadership Coaching Mechanism
Leaders need to be able to coach their teams to overcome challenges as they work to close the gap to their target condition. This does not mean commanding certain actions that the leader thinks will get results. Commanding is not coaching! Good coaching is a iterative process that allows a person to learn from experience and repetition while the coach observes and provides guidance as needed. The intent is to develop talent and capability in the learner – specifically the talents of learning how to learn, solving problems, making decisions, and improving the process. As a coach, let the learner go as far as they can with their own ability. When they hit a brick wall, and maybe ask for help, give them as little help as needed to overcome the specific issue they’re struggling with. The beauty, and growth, is in the struggle. This may mean teaching them new Lean tools, connecting them with resources, or providing some impromptu therapy. Be flexible – and teach them in the way that they learn best. But just know that the moment you as a leader become disengaged from the coaching process, the learner is likely to disengage as well from the improvement process. Besides, developing the talent of your people is one of your most important jobs.
Element #5) Engagement Mechanism
A Lean Culture is made up of a million small everyday wins. Leaders need to have visibility to these wins as they happen so they can recognize and encourage further progress and success. A person who is striving to improve their process and getting results should not go quarters, months, or even weeks without their leaders realizing and rewarding them for it. This lag time is demotivating. Leaders need to be on top of their game, just as they expect their teams to be.
All this may seem difficult to do if you’re already too busy and don’t have the tools in place to handle these activities effectively. This is where having the right technology makes a world of a difference. Heck, even Toyota has abandoned the old way of thinking that all Lean Tools should be manual processes. They were “suddenly motivated” to adopt technology once they saw themselves falling behind in the market. Fortunately for you and everyone else, technologies like Impruver.com provide enterprise-wide access to the most cutting edge methods that delivers all of the elements mentioned above plus more. Check the videos to the right of this page and click here to learn more.
Creating a Lean Culture might require some medicine, a bit of therapy, and some deep meditation. You may feel like Continuous Improvement doesn’t work for your company. Or maybe you feel like your doing all the right stuff and running up against a brick wall trying to turn the corner on culture and performance. Perhaps you’ve tried a few things that you were told would work and they didn’t produce the result you were looking for. Perhaps you just haven’t had the opportunity to see a working CI organization in action. Either way, there are some common themes that are present in every CI journey to varying degrees. These themes are synonymous with illnesses as they plague business results and can spread throughout the organization unless they are stopped before they kill the patient. There are some basic steps you can take to overcome these ailments and truly start to realize some organic acceleration.
Illness #1: People recognize opportunities for the company to improve but are fearful of mentioning them to leadership
Everyone has a unique point of view. Therefore everyone sees opportunities that no one else sees. The guy running the packaging machine has a much better idea for why the company gets pallets rejected by the customer due to unsealed boxes than the big boss sitting in a corporate office. I like the saying that “the person closest to the problem, is also the one closest to the solution”. Every company needs a good way of engaging people to improve performance in their area of ownership. To do this, try setting a clearly defined target condition for each employee in the company. Then hold their leaders accountable for coaching their employees to success against their improvement objectives.
Illness #2: The company has to hire externally for leadership positions because talent isn’t being developed internally to step up into higher-level openings
There is a delicate balance between getting results today and developing people for tomorrow. The companies that will lead the pack in the future are the ones that make the greatest investment in developing their people while delighting customers today. Avoid having your business decline to a culture of fire fighting so there’s some energy left over at the end of the day to prepare your people for tomorrow. To do this, create a back-fill (or successor) for every role in the company. Then provide assignments that give the successor experiential learning opportunities. This works even better if the experiential learnings are designed as Continuous Improvement projects that require deep understanding of key processes and provide a benefit to the business.
Illness #3: Leaders expect a short-term ROI for all CI activity with little regard for developing their culture
If serving the customer is at the heart of the business, ROI is the brain. In fact, if you’re not making money, you can’t continue to serve the customer. However, leaders must be careful not to sacrifice the capability to serve tomorrow’s customers by getting overly consumed by the challenges of today. This includes balancing investor payouts with re-investing in growth and development. To do this, couple activities that have great ROI with those that have marginal short-term benefit but are strategic for growth and sustainment. However, keep in mind that most Lean tools are not just one-and-done. When done well, they signify the beginning of the journey and not the end.
Illness #4: The company has a Continuous Improvement program that is disconnected from the strategy
News flash: making progress against your strategy is the definition of improvement. Randomly applying Lean Tools is not necessarily improvement. In fact, you may be wasting precious resources on things that don’t create value for the customer or the business. Don’t fall into the trap of “polishing the doorknobs on the Titanic” in the name of Continuous Improvement. If you find yourself with a so-called “rock solid” CI program, but are consistently losing market share, something is definitely wrong. To fix this, define a clear strategy for how to win in the market. Then challenge every employee to make improvements in their area of ownership that moves the business in the direction of its strategic priorities.
Illness #5: People aren’t getting to the root cause of issues impacting their area
There’s two variants of this issue. One is where people are pushed to hit their numbers everyday by any means; and the other is where operators just band-aid problems and wait for maintenance or management to swoop in and fix them when it’s convenient. It can be a difficult choice to risk not fully satisfying a customer to take the time to get to the root cause of an issue and permanently resolve it. But consider this, issues of today like to mix with the issues of tomorrow, which can result in quite a cocktail of chaos. Better to strike the balance between making the daily numbers and shutting down when needed to fix the process the right way. Your people, the process, you, and the customer will be happier for it in the long run. Start by training your process owners on root cause analysis. Then teach them how to measure their losses and set the expectation that they will make changes to reduce them over time. Then recognize and reward continuous and sustaining improvement in performance.
Illness #6: People are reluctant to experiment with improvement ideas out of fear of failure
We all love the part of the movie when the hero jumps in to save the day; and want to yell at the TV when the hero fails to make a seamless rescue. But in the movies, the hero is always encouraged to keep trying because otherwise there is no hope. We should do the same in business. We need to be careful not to discourage “right behaviors” like trying to improve performance, even if the result is sub-optimal. Learning and development, which result from trying, are pre-cursers to improvement. To encourage this, instead of focusing on success and failure, switch the focus to learning. Learning happens most effectively through experience, and trail and error. Promote a culture of discovery and sharing over one of “who got the highest numbers”.
Illness #7: People hide performance losses out of fear of “looking bad” or facing consequences
I once had a manager who tried to improve engagement scores by “educating the team” that they were more engaged than they realized. In other words, this manager did not intend to actually engage the people at a higher level, he just wanted to manipulate them into thinking they were already engaged. This manager would have been better off to identify what’s driving the disengagement and fix it. The same is true for any metric that indicates opportunity for improvement such as OEE, First Pass Good, On Time and Full, etc. To cure this, shift the focus away from hitting or failing to hit targets to one of gradual and consistent improvement. When people learn to define success as “getting better”, showing losses becomes less threatening and status quo becomes the dangerous.
Illness #8: Continuous Improvement is delegated to an individual or department and not owned by all
Just about everyone understands how CI can be an incredible asset to a business. But many people lack the skill and will to improve. Some believe that hiring a CI Manager or resource and sticking them in the plant is commitment enough for them. This sets a tone that CI can be done in a silo and the role of leadership is minimal. But you can’t buy a culture of Operational Excellence. You have to build it yourself. A CI resource who is very skilled can help coach but leaders at all levels bear the responsibility to make it happen. To cure this, every leader in the company should be challenged with a performance improvement target that aligns with the company strategy. Then deploy their team’s CI efforts to close the gap. The CI leader should pass their expertise into leaders and process owners via coaching – not by doing it all themselves.
Illness #9: There is a general lack of respect for people at lower levels in the organization
Empowerment is built on 2 fundamental blocks: 1) developing people’s capability so that they can make sound decisions and 2) trusting people to act in good faith and generally do the right thing given the opportunity. Empowering someone requires you to “give up” some of your power to others, resulting in an overall more powerful organization. Engaging people’s hearts and minds to a higher order can unlock unimaginable potential. To cure this, delegate decision-making and problem-solving to the lowest feasible level in the organization. Then coach (but not direct or micro-manage) the performer to further strengthen their capability.
If you find yourself trying to lead a Lean Culture and progress is slow and sometimes backward, don’t despair. What you’re experiencing is perfectly normal and sometimes patience and persistence are needed to shift the organizational culture. Focusing on the areas listed above will have a dramatic effect on moving the needle in the right direction. The key thing to remember is that Lean or Continuous Improvement is not a substitute for good leadership, but it is the ultimate compliment.
There are a ton of Root Cause Analysis methods out there, and new ones are popping up all the time. This post dives into some of the lesser known methods of RCA such as Kepner-Tregoe, Barrier Analysis, and Events and Causal Factor Analysis. Perhaps this will help stock your arsenal so that you have more powerful tools to crack bigger problems.
This is a more methodical approach that combines the best of RCA and change management to ensure that not only the problem is clearly identified, but the best solutions are also developed to address them.
There are four basic steps for using the Kepner Tregoe decision matrix:
This method is used to establish a timeline or “storyline” of events leading up to an incident. It works best for one-off major events that are caused by a series of other significant events.
The steps include:
This process ties events or significant shifts in performance back to changes in the process that may have contributed to the result.
The steps include:
This approach assesses the system of controls or “barriers” that are in place to prevent issues from occurring to determine which might have failed or malfunctioned.
The steps include:
This method creates a tree diagram of potential causes of an observable problem or result. It includes branches of potential causes instead of a simple linear approach used in the 5 Why’s
Here are the steps involved:
Root cause analysis is a great tool for developing a better understanding of why problems might be occurring in any process-oriented operation. RCA is a cornerstone of Continuous Improvement as it enables more effective solutions to be developed. As with any root cause, there may be several problems resulting from the same root. Therefore, fixing one root cause can produce a multitude of benefits for your operation.
As with any RCA, the root causes are just hypothesis that need to be proven (or dis-proven) through testing and experimentation. This means that a clear plan of action should flow from the RCA activity. The RCA does not improve a process. Making changes and observing what happens is where the real improvement occurs. And if you’re not seeing the result you’re looking for, you need to further your RCA, form new hypothesis, and continue to experiment until you get the right result. RCA coupled with deliberate action accelerates the learning process and produces powerful results in the meantime.