Implementing Lean World Class Manufacturing Means Major Changes - Recipe for Success (or Failure)

Implementing lean requires “Urgency for Change.” The lack of it means disappointment or even complete failure in implementing lean/world-class manufacturing. This seems pretty straightforward on the surface. Dramatic bottom-line benefits from success are well documented and made famous by many authors and thinkers, like Jim Womack and a host of others. So, what is the big deal? Just do it! Or, is there a little more to this than just listing the benefits and expecting everyone to jump on board?

I think Michael Hammer (the Business Process Re-engineering guru) is credited with the statement, “the soft stuff is the hard stuff.” He could not be more dead-on when it comes to the implementation of lean and world-class principles across an organization or value stream. Remember, lean is 80% to 90% people and 10 to 20% tools and techniques. What to do for success is not intuitive, and there are many forces that can prevent success.

Review the graphic below and then we’ll discuss the points.

It goes without saying that the forces that are for tackling the implementation of lean and world-class principles and approaches are easy to understand. Who would not argue for preserving jobs, increasing stakeholder value and achieving market dominance? Wanting to do the right thing is not the problem; overcoming the barriers to success is.

For our purposes, we will focus on the barriers in the graphics and suggest some actions and/or considerations for each.

Barrier # 1: Natural Human Resistance

One the biggest recurring flaws I see in companies on the lean implementation journey is the belief that by telling people how good things are going to do not ensure they will change. Far from it. Few (maybe 10%) of the people will get it to the degree that they will change their behaviors and actually do things differently. The rest of us need help.

Anthony Robbins has this hypothesis that goes something like this: “People are motivated by pleasure or pain. Getting one and avoiding the other is basically what drives our behavior.” If this is true, then we need to think about this principle and what we will do to enable people in our organizations to curtail old behaviors and adopt new ones.

So, following this logic, the trick is to make doing things the old way too painful to continue. Or, put another way, the pain associated with changing has to be less than the pain of doing things the old way. Think about lifetime smokers who have repeatedly failed to quit. Often, it takes a shocking life event–like losing a loved one or being diagnosed with cancer–to enable the smoker to quit. We need to recognize that the majority of people will need a shock to help them move to the next level.

Suggestions and Observations

1. Make physical transformation happen quickly. Implementing cells or forming natural work teams around the process is incredibly effective in helping people adopt new behaviors. Consider this: putting in a cell usually means new metrics, gives responsibility to each person to support the team and its goals and metrics and makes it very difficult to do things the old way.
2. Change your appraisal system. If we measure and expect behaviors to be in line with the lean vision of the future, people will naturally respond.
3. Insist on doing it the new way. This is an absolute MUST for executives and leaders all the way down the food chain. Once the team has decided how things will be done, not doing it isn’t an option. If leaders do not have the stomach for positive confrontation and continual reinforcement of the team processes, look out. People naturally watch what the formal and informal leaders do–what is acted out is reality–and not what was said.
4. Re-vamp your incentive program or consider creating one. If monetary rewards only happen when the entire team wins, it will be easy for people to figure out that changing is the only way to better their situation, as the only way to win is through effective value stream execution. An individual who excels in one area (say, beating today’s rate) probably does not have any impact on the output of the plant for that day. Continuing to reward for isolated overproduction is a huge mistake.
5. Don’t allow non-participation to be unnoticed. Again, leaders need the stomach for following through. Peer pressure is an incredible force. If, through my inaction or reluctance, the greater team suffers, there cannot be any place to hide. This is the power of the visual standardized workplace. Properly done, this allows everyone to know what is working and what is not.

Barrier # 2: Leadership Churning

What can I say? If the sponsor and/or leader is going to move on before the changes are implemented, it is a sure bet the next one will have a different agenda. This is what most of the middle management are secretly praying for: a new boss and a new agenda before we have to actually change anything.

I would suggest that a top-down mandate to achieve period-over-period, zero-based improvements is needed. Appraisals and job descriptions must contain specific actionable requirements to provide lean or world-class leadership. An ongoing  5S audit program is a great way to stay on top of things. 5S workplace organization is one of the first things that you do in a lean/world-class implementation. It is also one of the first things to slip when the wheels start to come off.

Barrier # 3: Traditional Accounting/Metrics

What gets measured, gets done. I don’t know who coined this, but it is true. That’s the good news. The bad news is this: traditional accounting is obsolete.

Think about the incredible amount of change we have seen in how we’ve conducted manufacturing in the last 20 years. Think about the changes you have seen in just the last two years. Now think about accounting, which is still being done fundamentally the same today as it was 150 years ago. This whole conundrum around traditional, standard cost accounting and why it impedes our success is way too lengthy for this discussion, though I would suggest picking up a copy of a good book on this subject by Gary Cokins–Activity-Based Cost Management: An Executive's Guide.

Barrier # 4: Lack of Urgency for Change

Two things seem to cause enough urgency for change to happen quickly–threats and visionary dynamic leaders. Threats from the outside in the form of competition and pressure from customers–on pain of losing your business–go a long way toward getting everyone’s attention to make change happen… quickly. Without clear and present danger, the next best source is the visionary and dynamic leader with the horsepower to make change happen. If you have both, consider yourself lucky.

In the absence of a clear need to change, getting people to seriously take the changes needed by a lean/world-class implementation is dicey at best. You may be well served to rethink your ability to successfully accomplish the transformation in anything resembling a short implementation cycle.

For more information on making major change happen in any organization, I recommend Leading Change by John B. Cotter.