Managing the Change to a Lean Organization
Managing the Change to a Lean Organization
(2) How do we engage the organization to develop the solutions-the new way of doing things-that we want? Fundamental change is invigorating but also difficult. For some people it is a great release of energy, for others it is often a threat. Let's first address the barriers to change, by distinguishing between the two kinds and discussing about how to eventually overcome them.
The Barriers to Change
One group of barriers to becoming a Lean organization stems from the actions and policies of senior management. The organization's structure may undermine Lean-too many departments that break up the flow of value-added work or functional lines of authority that are too strong. Measurements and rewards may be counterproductive. Old myths of the organization-such as our products are better so customers will only buy from us-will confuse employees unless laid to rest. Inadequate leadership and, in particular weak people in manager's roles, who are seen as not being able to solve the problems, and make the changes they are all talking about, will set any Lean effort back. All of these barriers must be eliminated by senior management. The organization can't ignore them and then talk about teamwork and faster cycle times and expect much to happen.
The change from traditional management to Lean management is fundamental and places new, sometimes conflicting demands on the managers of the organization, a factor that top management may underestimate in the beginning. Profit center managers may find the Lean message appealing but still take comfort in rising backlogs and greater use of fixed assets. Functional managers who were promoted on the strength of protecting the organization from costly mistakes may find cross-functional approaches very difficult to accept. The very first step in senior management's design of the change process should be to assess the capability of the managers at least three levels down. The most capable should be given strong roles in managing the task groups that remove the organizational barriers and design Lean solutions. The less able managers should be encouraged but left off the critical path at least early on. The least able should be sent to the competition.
The second group of barriers to change consists of the beliefs, habits, and concerns of employees that are at the end of the day under the control of the employees themselves. Many employees fear operations will collapse if the organization adopts a Lean philosophy. A large number will simply not know how to make the change to Lean work-it will terrify them. Others will see the change to Lean as a loss of turf or status or as a downgrading of their skills. And some will simply be grief stricken over the loss of the old way of doing things.
Although some of these problems will take time to resolve, most employees will respond to positive involvement in the Lean change process and to clear, consistent communication from top management. Fear and skepticism or disbelief for most employees indicates they haven't seen the lean approach in practice or they haven't heard the immediate leaders endorse it-walking the talk. It's easy for management to underestimate how many exposures to the new message and to early pilot successes employees need. The reason is that there are many mixed messages-years of doing it the old way, short-timers who say it isn't worth it, concerns that certain job classifications and specialists will disappear, and so on.
It is a good practice for management to address doubts about the Lean concept directly. Employees, especially long-term people, have strong beliefs about how the business works, and unless these are specifically challenged they can undermine the lean initiative. Many employees will find the lean vision runs counter to the facts. For example, they will believe that better and faster service will mean more inventories. It always has in the past. It is not intuitively obvious to most people that continuous flow can reduce cycle times and shorten customer lead times.
Engaging the Organization
How do we engage the organization in developing the Lean culture? This question brings us to the heart of the change process. Two of the most successful ways to engage the organization are Lean pilot projects/kaizen team events and reorganizing into value streams.
Lean pilot projects/Kaizen Teams
Pilot projects are a good way to energize those people in the organization who embrace the Lean philosophy and where local trial and error experimentation is the right way to generate solutions. Pilot projects work best when demonstration is the right first step and when a local manager is a champion of the lean initiative.
There are however, other cross-functional situations where issues are harder to define, where no one has a general solution in mind, and there is no natural champion to whom everyone involved reports to. Here Kaizen teams can be useful. Kaizen teams are problem solving teams of four to eight employees chartered to improve a particular process usually reporting to a Lean Champion. Their charter is to drop assumptions about how the organization works and come up with a better way. The aim is not highly polished, but rather the core workings of a way to do things that is dramatically better and faster. The whole premise behind the Kaizen team is using bottlenecks, breakdowns, and unmet customer needs as opportunities to learn. The teams use a variety of techniques-value stream/process mapping, root cause analysis, spaghetti diagrams, process base lining, takt time calculation, and old fashioned imagination.
Reorganizing around value streams
The best approach to becoming a Lean enterprise is to structure the company around value streams. A value stream is all the activities, both value-added and non-value-added required to bring a product or service from concept to launch and from order to delivery. It includes all the steps involved in providing a product or service from initial concept until the customer pays for the product or service. The value stream is made up of all functions and stakeholders who need to work in harmony to provide the product/service. The value stream is always identified with a product/service family-the group of products or services that broadly follow the same process steps.
Reorganizing or restructuring operations around value streams should generally follow pilot project and kaizen team events. The pilot projects and kaizen events will identify and eliminate waste in many of the organization's processes which will help management redesign the processes without the unnecessary layers or activities and better determined who should be responsible for the value stream comprised of the redesigned processes.
At the same time, the process of becoming a Lean enterprise requires strong top management commitment and leadership. It involves creating a vision, assessing managers several levels down, chartering pilot and kaizen teams, reading their results, and modifying the whole process as it proceeds. Top management will be called upon to resolve major tensions that surface along the way. For example, revolutionary changes like reorganizing into value streams will usually challenge the perceived or real power of some decentralized line managers or senior function heads. At this point these line managers or senior function heads may have to be reminded that reorganizing into value streams does not exclude them from lean thinking, or mean that some operations cannot occasionally be centralized.
Sustaining the Lean Effort
Sustaining the Lean effort and overcoming inertia requires institutionalizing the following rules:
Monitor progress against the Lean vision, and emphasize the gaps that still exists
Involve key managers in driving the next set of pilot projects and kaizen events and making sure the goals are not compromised
Follow up by instituting a new set of performance metrics and rewards, and phasing out the old ones
Communicate the Lean principles and objectives to all stakeholders (employees, customers, suppliers, union leaders, and others) again and again
Paramount to sustainability is to keep in mind that Lean is a journey not a destination. The real benefits come from a sustained effort over years, not weeks or months.
Willie L. Carter is the president and principal of Quantum Associates, Inc., Northbrook, Illinois. He is the author of the book "Process Improvement for Administrative Departments- The Key to Achieving Internal Customer Satisfaction", available on Amazon.com. Carter is a Certified Lean Sensei, Certified Manager of Quality/Organizational Excellence, and a Certified ISO 9000 Lead Assessor. For more information on how we help companies create customer value please visit our website at http://www.quantumassocinc.com Willie can be contacted at wcarter@quantumassocinc.com or by phone at 847-919-6127.
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