Starting a Continuous Improvement (CI)/Lean Journey
I have been working on a project for a few weeks that categorizes what companies are looking for when they seek a lean or continuous improvement leader candidate. While that sounds rather boring on the face of it, the project has actually been a very interesting look at why so many companies still don’t get it when it comes to continuous improvement (CI), lean and six sigma. For the purposes of this article, I am going to use CI/Lean as an all encompassing term. (Sigma is fast being absorbed into a quasi-lean mode anyway and that is a story for another day.)
Why does a company decide that it wants to enter into a CI/Lean journey in the first place?
Based on fifteen years of experience with a large number of companies, the answers are pretty straightforward
It seems to be the right thing to do
Everyone else is doing it
The CEO/CFO/Board/Guiding Coalition said so
We have no other choice
Besides the last one, the list isn’t exactly a compelling case for a successful cultural change initiative. The unfortunate thing is that once a company does reach the point where there is no other choice, they will probably fall into the traps that help to ensure their failure. While reaching for the bottom, they will actually accelerate their progress.
Looking at why: The Root Cause
In CI/Lean, we spend a lot of time on root cause analysis. The goal is to make sure we understand why something really happened and hopefully build up a defense for it not to do so again. The first real problem I have seen is that the very people who are supposed to initiate the initiative have no experience actually using the very tools that could keep them from making mistakes.
1. “It seems to be the right thing to do”
In most cases, companies who use this approach are moderately successful and have fairly good cash flow. Besides some minor structural issues they are cruising along and have their share of the market. CI/Lean is something they have heard about but since it was an important part of their DNA, selecting candidates prior to this has not included seeking out specific competencies related to it.
The finance folks are traditional financial people with detailed knowledge of traditional financial metrics. Even the engineering folks have been selected because they came from the “right” schools with the training and discipline that matches the existing engineers. All of the management folks are used to traditional methods of measurement and definitions of what success looks like. Their pay and bonuses are built around a certain model and that is just fine with most of them. Even the workforce understands that as long as they do their tasks in the appropriate manor, they get to go home at a certain hour and watch their favorite sports team win (or lose). Life is very pleasant.
2. “Everyone else is doing it”
These companies often look like the first set of companies but they have one difference. They are feeling a bit more pressure from the market place (including their customers and suppliers). The supply chain often provides a stimulus since they are trying to improve in order to compete better. It is literally a chain reaction that impacts even the unsuspecting.
For instance: a customer has implemented a just in time approach based on an a need to improve their product flow reliability to their customer. Once that kicks in, you may start feeling pressure to change the timing, quantity, packaging, unit of issue and so on. That change will also include a request for some pricing differential too.
A company that gets caught in this loop is often forced to change at least part of its process. When Toyota tells you to dance, you dance or else you face the loss of some pretty important business.
3. “The CEO/CFO/Board/Guiding Coalition said so”
This is actually one of the most dangerous reasons to undertake a lean journey. The people in the internal chain of command in most cases do not know the root cause for this “request”. In a traditional company, there will be layers and layers of people who will deflect the answer to the “why” question with many clever corporate responses. That is assuming the corporate culture even allows them to ask the question in the first place.
Don’t get me wrong. There are probably some companies that have visionary CEO’s who honestly see the need to move towards a system that perpetually improves itself. But remember that these are the same people who have had their own mental models of success ingrained into their life’s experiences. My favorite saying about change applies directly to them: Everyone wants change but nobody wants to change. The higher up in the company a person is, the more resolute they are about this maxim. Good luck with changing that culture.
4. “We have no other choice”
Market conditions have finally caught up with the stagnant company. Material prices, labor costs, energy, infrastructure, insurance and so on are all rising with no relief in sight. Business regulations from government are also growing choking off innovation and growth. The only way this company can survive the endless recession is to find ways to drive waste out and develop a culture of continuous improvement.
The main problem these companies will find is that there are three cultural influences at odds.
The first cultural influence is the culture of grief for the way things were.
- “We used to be so good. What happened to us?
- “If only we could go back to the way things were.”
- “Its not fair. Management should have seen this coming and done something sooner.”
The second cultural influence is the culture of survival in the current state.
- “I only have three more years until retirement… if we can just last that long.”
- “What we have is working, why mess with this and risk screwing it up.”
- “Corporate is just looking for another reason to shut us down.”
The third influence will come from trying to implement a culture where change is not only needed, it is required to survive.
- “We’ve always done it that way… not anymore.”
- “I am the subject matter expert. Improvement is not possible.”
- “We innovated this process. No one does it better than us.”
We need to fix this and fix it quick.
Quick, somebody call HR and find us a CI/Lean leader!
See Searching for Superman – why CI/lean initiatives often fail (Part 2)