In the second of a two part series, Professor Peter Hines, chairman of the Lean Enterprise Research Centre at Cardiff University and consultancy S A Partners explores how multi-site organisations can develop a durable lean approach.
As we discussed in the first part of this article (October 2009), firms in the lean world have moved from asking questions like “where do I start?” and “who should I involve?” to more pragmatic questions such as:
1 How long is it before the benefits start fading away?
2 Why do people seem to have lost their enthusiasm for Lean here?
3 How do you ensure continued buy-in from the workforce?
The previous article started to explore answers to these questions. We looked at two of the critical hidden or ‘below the water’ areas of Strategy & Alignment and Leadership. Here we will review the third ‘below the water’ element of Behaviour & Engagement as well as the more visible ‘above the water’ features of Processes and Technology, and Tools & Techniques.
Behaviour & Engagement
Why focus on the employees? Organisational change for many people is associated with feelings of insecurity, uncertainty and anxiety, often leading to lack of buy-in and employee resistance. Getting all employees on board from the outset is crucial to sustaining Lean change. Michael Hammer, reflecting on the failures of BPR (business process reengineering), told The Wall Street Journal (Nov 26, 1996) that he and other re-engineering leaders forgot about people. “I wasn’t smart enough” he says. “I was reflecting my engineering background and was insufficiently appreciative of the human dimension. I’ve learned that’s critical.”
Marcel, CEO of Cogent Power had a vision for the business as a self-propelling organisation. He recognised that to achieve this required a change in culture, encouraging the right attitudes and developing capabilities. His leadership helped to inspire a set of appropriate behaviours and high levels of engagement.
He notes that “(To achieve) waste elimination and continuous improvement….the organisation as a whole (needs to have) the attitude, the culture and the capabilities at all levels within the organisation to achieve continuous improvement and sustain itself in the future. It is an organisation that does not require a management initiative, a customer initiative, a shareholder initiative to improve – it comes from the desire and the will of the people inside the organisation. This requires a commitment everywhere in the organisation to improve and to eliminate those obstacles that delay, prevent or inhibit improvements.
It is management and leaders’ responsibilities to ensure that the organisation takes actions on all employees ideas and suggestions for improvement, and that good ideas for improvement are acted on quickly so that wastes can be eliminated and improvements generated. It takes a whole cultural change to make this happen. This is our desire, and our goal.” To do this required a self propelling organisation that paid careful attention to behaviours and engagement.
Examples of the necessary Lean behaviours to do this include: trust, honesty, openness, consistency, respect, reflection, observation, objectivity and listening. Wasteful behaviours include: blame, ego, distrust, cynicism, sarcasm, ambiguity, subjectivity, insincerity, self-imposed barriers and negativity. So how do we create Lean behaviours? Well, you can recruit people that exhibit Lean behaviour and then you can equip everyone with the right skills through training and development; but this is not always enough to achieve the right change in culture that is necessary to ensure that the change sticks.
Would you show your family your work toilet?
How do you build an environment for sustainable Lean? It involves examining all the elements of the organisational structure with its policies, procedures, measures and rewards to see if any are acting as roadblocks and stifling progress. Changing behaviours involves changing the culture of the organisation. So let us consider culture for a moment.
Culture is like the wind. You can feel the strength of it, you can see the effects of it, but there is nothing tangible for you to describe. So we tend to think about culture as the social, moral and behavioural norms of a group or organisation, which are based on the beliefs, attitudes, values and priorities of the members.
The culture of the organisation is typically created unconsciously, based on the principles of the top management or the founders, of an organisation, and it exists where a group of people have been together long enough to have shared problems and have had the opportunity to solve them.
To make any significant organisational change, such as Lean, stick involves creating the right culture; a Lean culture. Marcel would say to employees, “Look at your environment and ask yourself these questions.
Would you be proud to show your family your workplace? Would you dare to show them the rest rooms, the toilets, the canteens?” The upgrading of the toilet facilities at Cogent Power is symbolic; part of the visible artefacts, but it has demonstrated Marcel’s values and his respect for people. The tale has now been passed down as one of the stories that support the cultural change.
An atmosphere of inclusion
Traditionally organisations have concentrated all their efforts on the things that improve performance: productivity, profits and growth. They have undervalued the influence of their employees’ emotional attachment to the business as a driver of profitability and growth. One thing that is very clear at Cogent Power is the high level of employee engagement; at all the plants employees comment on the ‘family atmosphere’. This engagement has built up over time.
Part of the engagement is also down to the work of Peter Rose and other HR managers, in developing the atmosphere of inclusion by holding family barbeques, including families in the Lean Award prizes and including contractors in the eligibility to apply for awards. Like behavioural change, communication is the key to engagement. People need to be aware of what needs to change and why. Everyone needs to be told the same story at the same time.
Another important mechanism for engagement is training. This took place early in the Lean implementation at Cogent Power. The first session was for the senior management, over two days at the Mathern Palace Meeting in December 2003. All the senior managers and divisional directors were given an intense introduction to Lean, covering policy deployment, value stream management, crossfunctional teams and Lean tools. The second phase involved developing and training the Lean coaches.
The emphasis here was on ‘train the trainer’. The Lean coaches were equipped with the knowledge and skills to run improvement projects and train others in the Lean concepts and tools.
To maintain progress and engagement Peter Rose used the Seven Lean Skills described by Doug Howardell as part of the recruitment and annual appraisal process. Employees are reviewed formally by their line managers and their competence in each of the seven skills is assessed. As a result the high levels of behaviour and engagement were reinforced by the management system that was put in place.
Above the Waterline
Above the waterline are all the visible features of a Lean implementation. Organising around key business processes and engaging in process improvement are the cornerstones of a Lean Enterprise. Applying Lean tools, technology and techniques to improve, sustain and maintain business processes is the route commonly taken by organisations attempting to enhance performance. Visit any ‘Lean’ organisation and you will see examples of process management and the application of Lean tools. Visit any ‘Real Lean’ organisation and you will still see process management and Lean tools; what you won’t see is all the effort that has been put in below the waterline; to strategy and alignment, leadership, behaviours and engagement that sustains the Lean transformation.
We will now have a look ‘above the waterline’.
Many companies applying lean never get past the shop floor, let alone the Order Fulfilment process.
‘Real lean’ companies look at all their processes over time. Two things are important when first looking at businesses processes.
Which processes are key to the core business?
How do you design and optimise key processes to deliver value to the customer, business or value stream?
Each business process comprises a number of steps, tasks or activities that convert a series of inputs into outputs. Our example shows some common processes, but you should always define and agree your own for your organisation.
Figure 2 – Key Business Processes
Although much of the early focus at Cogent Power was on getting stability in the Order Fulfilment process, there was also some initial Lean work with commercial departments to standardise the Order Creation process. Mindful of the first Lean Principle, ‘Understanding value from the customer’s perspective’, Cogent Power began engaging with key customers at the outset, discussing the basic value requirements in terms of quality, cost and delivery of both products and service.
So why were both of these processes addressed? Well, we believe that you need to focus on both waste reduction and value adding. Let’s explore further: Ask yourself the following question. What is the saving from a typical Lean Order Fulfilment improvement project, such as changing the material flow in a manufacturing cell, which reduces the requirement for people by 25%?
There are three potential responses
The third systematic approach requires expert project management skills and strong cross-functional management to ensure that the additional capacity is released in time to meet the extra sales. Failure to achieve the right balance could lead to a worsening on-time delivery performance and customer satisfaction, with a consequent loss of repeat new orders. However, it is the understanding and ordering of which processes to improve that is critical for success….few firms get this right!
(The fifth element of the Lean sustainability iceberg, Technology, tools and techniques, is covered in this article online at www.themanufacturer.com)
Cogent Power’s journey to Lean involved addressing all elements of the Sustainable Lean Iceberg, but the progress that they made reflected local decisions and corporate policies. It was contingent on local needs but centred around one corporate vision across the group.
The key to their success was in addressing all elements of the Iceberg. A number of key lessons can be drawn from their experience in creating a sustainable lean journey. These are summarised in the final table.
Prof Peter Hines can be contacted at [email protected] or visit: http://www.linkedin.com/in/professorpeterhines, www.leanenterprise.org.uk and www.sapartners.com.