Strategies for Deploying Lean - Go Deep or Wide?
I was recently invited to give a keynote as part of a global event to launch a lean transformation of a multi-billion dollar bank with hundreds of locations all over the world. The ballroom had tables set up by each executive’s country. After a general introduction to the exciting changes ahead, I spoke about lean as developing people to continuously improve processes. An executive from a manufacturing company also spoke about their own company’s lean journey emphasizing the importance of changing culture. The vice president in charge of the transformation then laid out the company’s strategy, which covered the whole world at once and an expectation of $3 billion in one-time savings plus $1 billion per year in sustainable savings.
What the vice president was describing was a whole system change, in one fell swoop. From his perspective, reporting directly to the CEO who reported to the board of directors, he needed to make a big splash and fast. He was vague about the program for streamlining the core process of the organization, but he did mention a large consulting firm was tasked to lead and coach. I could make a pretty good guess as to what was coming—shared services, outsourcing, consolidating locations for synergies, reorganizing, and creating standard procedures with a heavy dose of automation in software thus requiring everyone to follow the new standards. This would be a blend of traditional restructuring for cost savings, the development of new IT systems, and some lean tools like standard work. The VP repeatedly called for broad employee engagement to give ideas for change, but this was clearly going to be done to them, not with them.
This is an extreme form of the company-wide lean tools’ approach summarized in figure 1 with its strengths and traps. Another form is to create your “operating system” and specify training on lean tools, deployment schedules for the organization, and audits for checking progress. Often, a poor score on the audits leads to reduced bonuses for executives and managers.
In a recent Industry Week blog post, I point to some of the traps associated with enterprise-wide transformation. To summarize, it could lead to finding low-hanging fruit cost savings and “feel good” to senior executives. But, it will feel stressful, disruptive and punitive to most of the organization and is not likely to lead to connected flow that makes work smooth and logical. Furthermore, it will not develop a culture of continuous improvement because, while widespread across the company, it is very shallow in the depth of skill and learning.
Other companies have broadly engaged employees by working on specific problems, or what we call the “hot problems” approach illustrated in Figure 2. A common tool used for this is Rapid Improvement Events. In this practice, a team of people with a coach spend one week blitzing through the process making as many changes as possible and leave behind a long list of homework items to be done in the next month or so after the event. With a good coach, this can be very engaging and exhilarating. I have colleagues who leave people in tears by Friday afternoon when they celebrate the remarkable changes they have made. They feel both exhausted and grateful for all they have learned and accomplished.
This approach generates both quick results in selected areas, often solving nagging problems that have haunted the organization for many years, and gets people excited about change. What could be bad? Certainly, positive change in processes and people is a good thing, but is it sustainable? Nine times out of ten, after the event when people go back to work, little of the homework is done without herculean efforts by the coach, and people find it difficult to use the new tools and procedures that were developed in the week. Quite simply, too much has changed too quickly for people to learn and absorb the changes which are rarely sustained.
Earlier this year, we talked here about the benefits of having a challenging vision, but breaking it into small bite-sized steps so the people working in the process could develop, implement, and learn from each step. This can happen in the value-stream model line approach summarized in figure 3.
This is the preferred approach by most Toyota master trainers I have met. In this approach, the goal is to simultaneously improve processes and develop people. An important value steam is selected that matters to the organization. It is scoped out so that it can be transformed in a major way in three to six months. Some coaches prefer to dive in and begin to understand the current situation with the team, and others, use value steam mapping as a tool to map the current state. A vision for the area is created. Then, the vision is broken into smaller pieces which are attacked one by one. The result is usually better flow, better communication, methods for building in quality, some degree of standardization, various charts and graphs posted that include tracking metrics on the process and outcomes, and daily meetings to check progress and decide on next steps. The underlying foundation is Plan-Do-Check-Act. With a good coach, the learning is remarkable and the improvement process can continue long term. The learning is mostly confined to the group involved in that value stream project, which can include coaches in training who can then lead similar value stream transformations in other areas. However, someone needs to stay with the model area to keep it moving forward, at least on a part time basis.
I would somewhat oversimplify the challenge by asking if you want effectiveness or efficiency? Do you want changes in broad strokes that are shallow in people development and not apt to be sustainable, or will you take the plunge to go deep to develop leaders who have the capability to sustain continuous improvement?
Note: The figures are from The Toyota Way Fieldbook by Jeffrey Liker and David Meier.
Dr. Jeffrey Liker is professor of industrial and operations engineering at the University of Michigan and author of The Toyota Way. He leads Liker Lean Advisors, LLC and his latest book (with Gary Convis) is The Toyota Way to Lean Leadership.