The human touch

Posted on 4 Aug 2011 by The Manufacturer

Ambitions for the scope of lean initiatives are far greater today than they once were. Beyond the shop floor the idea of end-to-end lean enterprise is now the ideal, but achieving this is easier said than done. TM looks at the role of the HR department in supporting the lean enterprise dream.

What this article tells us

HR departments need to understand lean principles and objectives and the way in which they work

HR can support and strengthen a sustainable lean deployment by:

● Communicating the changes brought about by lean thinking to staff at all levels

● Increasing the visibility of lean achievements

● Validating new capability frameworks

● Enforcing organisational redesign

HR professionals can transform their work through applying lean principles by:

● Removing burdensome administrative tasks through both internal and external outsourcing

● Freeing themselves up to support strategic organisational development

Above all other departments or business functions, HR departments have the potential to drive the uptake of new organisational behaviours through policies on recruitment, reward and progression.

HR professionals however, have not always been included in lean implementation programmes or been educated about the motivations behind lean principles.

This being the case, it can hardly be surprising that so many manufacturers suffer from an ‘islands of excellence’ syndrome on their lean journeys.

A large number find it difficult to progress from a stage where a few lean projects are enthusiastically participated in to a stage where all employees are aligned in their pursuit of value. At this stage, the workforce will understand how their work impacts on others and how it reflects their understanding of organisational purpose.

In attempting to tackle this issue some organisations have restructured their HR policies and embarked on detailed lean education programmes for HR staff. Changes made include altering job descriptions to include higher expectations around lean awareness, and changing balanced score cards or appraisal processes so the success with lean initiatives has an effect on career progression.

The credibility crunch
Philip Holt, director of customer collaboration online at Philips Consumer Lifestyle said in a recent Lean Management Journal article: “HR is critical to bringing credibility behind a lean competency framework. What must be avoided is creating a situation where lean competencies are seen as parallel to ‘normal’ business competencies. They must be integral and they must link in a real and readily understood way to an individual’s ability to develop themselves within the business.” In general, the ability of HR departments to influence the spread of lean culture and magnify the benefits gained from an implementation programme is one which, so far, has been better exploited by service organisations. Despite their relative newness to lean principles, these organisations often have better established HR contingents and boast a better understanding of performance management in environments where output is not directly tangible. This is a challenge for manufacturers, as they are more often than not much more focused on physical productivity.

Fiona Roche, head of operations at Lloyds Banking Group, has managed to ensure that the bank’s lean agenda has continued to grow and bring benefits, despite a highly public merger with HBOS and an environment in which banking performance was under intense scrutiny.

In such a sensitive environment, the alteration of pay packets, job description and management expectations can be difficult to implement.

“We had to educate, from fresh, HR professionals about how lean thinking impacts work and changes job descriptions.

HR needs to understand that lean will change expectations around job roles,” said Roche in an interview with Lean Management Journal.

Andrew Spence, supply chain development director and Rosie Warner, human capital management business development director of software and consultancy company Oracle share their advice on how to empower HR departments in embedding lean culture:

What role can HR play in helping to further the process o leaning an organisation? The key driver behind lean is to remove any activities that do not add value to the customer. HR can support this by promoting a culture of continuous improvement, efficiency and professional development within an organisation through the department’s own processes and systems.

If they do this, manufacturers will be better positioned to exceed current efficiencies and ensure that they attract and retain key talent.

To achieve this, manufacturers can:

Engender the culture of lean within by introducing rewards based on performance and desired behaviour. Within a lean environment manufacturers need to reward employees who are efficiently managing their department, team or work area. This work often goes unnoticed while outdated reward schemes, which promote non-lean behaviours, are maintained. Manufacturers need to ensure appraisals and performance reviews highlight achievements made through the application of lean principles and recognise the value such activities add to the business through appropriate rewards.

Use HR systems and processes in order to better manage their talent in lean processes, ensuring the relevant employee with the required skills is in the right place at the right time. In doing this a company can come to understand the need to develop specific lean talent, such as kaizen (continuous improvement), Flow Manufacturing and Total Productive Maintenance, in the areas of the business where these skills can be most usefully applied. This allows a more rational deployment of resources, and positions the company for growth.

Ensure that if they are a dispersed organisation, a centralised HR system supporting local regulatory requirements will help improve policy deployment and realise benefits across different operations. Centralised support for lean from HR enables consistency in the delivery of training and the setting of standards.

This assists with employee’s satisfaction in their work and helps with talent retention.

As companies grow and become more complex they will need to implement agile HR technologies in order to acquire the above capabilities. These technologies should enable strong analytics processes for both talent management and performance review. They should also deliver strong ROI for the business through features like HR Helpdesks and employee self-service portals. The technologies implemented need to be based on open standards so that they are interoperable with existing technologies; increasing efficiency and communication between locations or departments.

Tandem teams
Going forward, the lean deployment team and the HR department at Lloyds have policies in place to ensure close communication about the direction lean projects are taking and the involvement of individuals or business areas in those programmes. This ensures that balanced score cards – already re-engineered to include lean terminology and expectations – are kept up to date with lean business improvement directions. “HR can have a real influence in changing this to support the much more team-oriented ethic of lean improvement,” concluded Roche.

Clarifying the business case for involving HR in lean implementations Philip Holt points the symptoms visible in companies which fail to do so: “What you see is projectbased, ad hoc improvement. It is easy to end up with a twin track where people follow regular HR policies to further their careers but use lean policies to help manage individual projects and day to day work. This way of working is disjointed and dysfunctional.”

e2v’s experience

Providing an insider’s perspective, Dina Knight, group HR director at hightech engineering firm e2v, shows how a lean ethos can transform the potential of an HR team:

HR encompasses many roles within a business; however it is commonly linked to administration roles and this needs to change.

A strong HR team works in tandem with the company as a business partner; influencing strategic development, talent strategy, and the overarching operations of the company with effective recruitment and progression policies.

Administration, while an important aspect of any business and any HR function, is time consuming and can detract from the important strategic role HR plays.

HR runs across almost every aspect of strategic, functional, and operational business but taking on a lean ethos in HR departments will require a strong and integrated HR unit. My experience of achieving this in other companies has involved the introduction of HR efficiency systems which have enabled managers and employees in the wider business to take responsibility for administering their personal data – holidays, absence, changes of address, and so on.

The effect of this was reduced administrative burden for the HR team – therefore an increased amount of time available for adding value to the business in the strategic sense outlined earlier. This facilitated a change in perception for, and of, HR. It became a proactive partner in leveraging business improvement and growth.

Of course, following this strategy initially presented challenges. Some employee push back was experienced and an initial training period was essential while staff transitioned to the new system and way of thinking about their responsibilities.

However, once the systems were in place, the benefits were great. The HR role was efficient, but crucially it was also more strategically productive due to the extra capacity gained in e2v’s experience internally outsourcing aspects of administration. This was previously misconceived as HR’s primary function.

e2v is a global manufacturing company, with offices in a number of countries. Managing the workforce across these locations is labour intensive and involves administrative practices which add unnecessary time to necessary processes, while obscuring potential and more valuable strategic improvements.

Following the ethos above, we will be launching a global system to align the company from a HR and data management point of view. To leverage lean HR successfully, administration needs to run like clockwork.

This means removing the burden of time consuming manual spreadsheets and other time-hungry, outmoded methods of data processing. There are many ways to go about this and it takes a blend of approaches, depending on the company.

As companies expand, it may be prudent to look into outsourcing some administrative requirements to expert companies who can perform those tasks in a more cost effective and efficient manner.

The important thing to bear in mind however, is that with strong policies and professional working practices in place, HR can work with the business to add value on both a strategic and operational level.