Leaning Toward Change

Seduced by the publicity surrounding the impact of Lean on organizations, it's no surprise that people new to Lean, upon hearing or reading such information, are anxious to implement a continuous improvement initiative in their organizations.

What has received little publicity, however, and often frustrates Lean implementation, are the employees on whom Lean is often inflicted, albeit unwittingly. The culture of an organization can repel attempts to implement Lean, so it is vital to understand the culture that you have, so that you can create a cost-effective implementation plan. I say cost-effective, because many organizations spend more time, effort and money to implement Lean than they first envisage, or they give up, or they settle for a halfway house solution. Often, they do not realise that it is their prevailing culture that is out of alignment with the ideology of Lean.

Here is a story of one company, between 2002 and 2004, who realised that they needed to be cognisant of their organizational culture when implementing their Lean programme. The company concerned is a fully integrated manufacturing business, covering product development and design, through to product installation. Sales are around $25 million. They employ 150 people. The company had changed ownership at the beginning of 2002, moving from being part of a much larger business to a stand-alone profit centre. I'll call them ABC Co, for purposes of anonymity.

In the summer of 2002, a survey was undertaken, to assess the prevailing organizational culture, to understand how well the existing climate would support Lean working methods. The results were revealing. They showed that, on nine out of the ten 'dimensions' of organizational culture, employees perceived the organization as being below average. In particular, the employees felt that communications, structure, planning, leadership & humanistic working practises were inappropriate. Interestingly, the one above average response said that employees viewed the organization as being a sociable place to work, although morale was slightly below average.

Put into context, employees appeared to be saying that the organization was very hierarchical, rigid and autocratic and not a people centred company. The sociability seemed to arise out of two situations: firstly, the organization had been established for very many years, with little staff turnover, and secondly, employees 'stuck' together, to defend themselves against the management. Morale appeared to have dropped over the preceding months, largely because the employees were apprehensive about what the new management team were going to get up to. This did not appear to be a particularly good cultural backdrop for a smooth Lean implementation programme.

Meetings were held with the Directors, to discuss the results of the organizational culture survey, and to create an action plan to try and improve the working climate, before announcing a Lean implementation initiative a few months later. Incidentally, during the survey, employees had commented negatively on how previous management initiatives had 'fizzled-out' after a very short while.

Anecdotal evidence during the period following the original survey suggested that the management were trying to address the employee concerns. A Lean initiative was announced, and commenced in Autumn 2002.

In January 2004, the organizational culture survey was repeated.

Compared to those four 'dimensions' in the 2002 survey, which attracted particularly negative views from employees, the 2004 survey results showed that employees perceptions had improved marginally on communications practises and considerably on leadership practises and organizational structure. Employee perceptions had lowered on how sociable the company was and how committed employees were towards the company. This was echoed in the morale 'score', with a drop of 26%, and on the secure/insecure scale, a drop of 31%.

Comparing the 2002, and 2004 surveys, some of the key findings were:

- Whilst employees perceived that the organization had repositioned itself to become more customer focused, and more competitive, they did not feel as happy, or as secure as they previously had.

- Employees initially enjoyed the communication sessions, where they heard about the Lean implementation initiative, which sounded like a good idea.

- The Lean implementation programme had started well, and employees felt informed and involved.

- The communications sessions became less frequent, and patchy.

- Employees became less involved with continuous improvements, supervisors and managers started to tell employees about what Lean changes were going to be made.

- Employee turnover for the past three years was rising, with an overall turnover of nearly 70% during the period.

Conclusions

The new management appeared to have had every intention to engender an organizational culture that was more conducive to Lean working, and originally started out in earnest to change the working 'climate'. Unfortunately, many of those management actions that were agreed, to improve the working climate, and initially implemented, started to falter. This was mainly due to commercial pressures imposed on management time and, in response, the management tried to speed up Lean implementation, in an attempt to reconcile their time pressures whilst still producing the desired business results. As a consequence, a number of continuous improvements were originated and implemented by supervisors and managers, not by employee teams. As a result, employees felt less involved than they were, less motivated, and started to think that there was a 'hidden agenda'.

Here is a good and factual example of how Lean implementation can fail to achieve the desired results, because not enough attention is paid to nurturing the culture of the organization. In ABC Co, the decision to implement Lean was decided locally, so there wasn't a head office imposing it on unwilling Directors. Why is it that a group of Directors, seemingly committed to Lean principles can fail to realise its potential? There has to be a good personal understanding of the people side of Lean, implementation has to be at a pace that takes employees with you on the journey, not leaving them someway behind, scratching their heads, wondering what it is all about. It's all too easy, especially for experienced Lean practitioners who move to a new company, to go too fast for the employees; they need to have time to understand, practise and adapt to the Lean ways of working. I'm not suggesting that Lean implementation has to be a slow, arduous process, far from it, but if you want a timely and successful introduction, you must major heavily on the people-side of the process. Take communications, it is amazing just how insatiable employees are for information. Many organizations fall into the trap of reducing communications, because employees don't seem to be bothered - some stand there looking bored. Don't be misled! As you reduce communications, I bet that there is a positive correlation with lowered morale, attendance and participation, although I haven't tested for this - yet.

Mark Eaton holds the Viscount Nuffield Medal for his contribution to UK Industry and was until recently the Director of the UK Government's Manufacturing Advisory Service for London and South East England. Mark wrote this article in collaboration with Tim Franklin who is completing his doctoral research in organisational development.

markeaton@advanceprojects.co.uk