The answer is not as esoteric and arcane as you might imagine. It is actually quite simple. Leadership is the key to Lean transformation.
But while identifying the solution is relatively easy, putting Lean leadership techniques into practice is not so straightforward.
Forgive the cliché – but it’s very much a case of learning to walk before you can run.
The key to being able to employ Lean thinking techniques is learning the knowledge, skills, and attitudes of Lean leadership.
In other words, the secret to transforming one’s organisation and make it Leaner in order to better satisfy customers improve sustainable profitability is… self-transformation.
Lean is not for everybody. The lasting competitive advantage promised by Lean thinking requires a deep commitment to change one’s approach to business and one’s leadership style. Lean is a specific, time-tested method for leaders determined to seek superior performance by developing their people and partners. This means abandoning the mechanistic people-free 'project management' outlook and adopting a more organic, people-centric, developmental perspective on Leaning a business. It is about moving from command-and-control to instruct-and-improve.
Acquiring such Lean leadership skills requires personal development at four levels:
One needs to understand the practical nature of Lean. Lean principles and practices are learn-by-doing tools so that teams can see the waste they generate through routine work habits allowing them to discover new and innovative customer delivery techniques. Lean methods can make work easier and can eliminate waste-driven costs to make the business more competitive. As a leader this means learning to go directly to the workplace, seeing what is there (as well as what is not), and having a direct relationship with the teams to challenge them to practice Kaizen and support them in their efforts.
Lean leaders must learn how to establish the management systems that will support wall-to-wall Kaizen across the organisation. A key question, every leader should ask is, 'are ‘improvements’ making the business more competitive, and the change they have effected is not just random change?' This involves progressively discovering the improvement dimensions that require capability building, creating the ad hoc measurements that will reflect real progress and setting up a system of regular visits and reviews to support Kaizen efforts from workplace teams, as well as cross-functional process improvements.
Lean leaders must be prepared to promote middle-managers. Those managers can then learn from team’s Kaizen efforts and to develop standard work as well as change their own departmental procedures to act on the improvements invented and tested by the teams. Middle-managers must be prepared to change the way they work. It should no longer be about deciding how to execute orders from senior managers (ie. or resist them) and telling who does what. Instead, Lean leadership is all about improving through sustaining Kaizen and learning from these Kaizen activities to change department procedures and processes point by point.
From the regular ‘go and see’ visits, Lean leaders will learn the transformation skills of effecting larger changes by creating better teamwork within their department heads and flowing work across silos to better focus on end-to-end customer value. This attitude stretches to better collaboration with suppliers where most of the technological platform changes will first occur, to lead true innovations by offering new value to customers from more intense collaboration across the supply chain. In practice, innovation requires capability building, which, in turn rests again on developing individual competencies.
Most Lean manufacturing programmes roll-out the Lean tools without addressing the profound changes in leadership needed to create a sustainable Lean culture. As a result, after gathering low hanging fruits for the first two years they then typically flounder in their third year and are abandoned or rebooted in their fourth. Having worked with many leaders beyond the fourth year horizon, I have witnessed them continue to make Lean improvements after ten years. Experience has taught me that some leadership attitudes must be changed throughout, in the way business situations are observed, in how leaders orient themselves in real-time context, in how connected they are when they decide and how well they work with their people to act continuously. The eight key Lean leadership attitude changes are as follows:
- Put customers first: social norms are what groups normally produce, and if you don’t lead customer focus, Kaizen will be turned towards 'improving' internal matters. Productivity is wealth, but real productivity is not achieved by passing on costs to others (customers, employees or suppliers), but by discovering the over-costs caused by operational methods and poor decision-making, and how day-to-day decisions affect customers’ perceptions of benefits and costs.
- Learn from Kaizen efforts at the workplace: when the leader understands the micro, his or her business performs better Leaders who go to the workplace to find out facts at source and progressively build mental models of their entire business, from understanding what customers value, to learning what makes work easier, to understanding lead-times in the supply chain and technological platform changes, usually make the greatest gains for the companies that they work for.
- Master the details of the tools and the big idea behind each of the tool: don’t delegate Lean. The purpose of Lean tools is to progressively move the decision-making process away from management desks and meeting rooms and towards products and people. This is where the most value is created. Don’t be afraid to use visual management to help teams pilot themselves and also Lean tools and techniques to help develop each employee’s judgment, skill, and expertise (rather than invest in centralised systems that take decision-making away from where value is created).
- Seek dynamic gains rather than static optimisations by being very clear on the performance gap you aim to fill, the improvement direction you expect from Kaizen efforts, and by investing in test methods to see whether progress is happening or not. Forming new solutions with the people in the organisation requires orienting them towards the key improvements sought, towards building capabilities by showing respect for others’ success by developing competencies with people in order to form innovative solutions through teamwork.
- Who is on the bus really matters: the ultimate test of a leader is the competence and good sense of the officers they surround themselves with. In Lean, the number one job of any leader is to develop others leaders, and encourage leadership in every one at the workplace (initiative and inventiveness in caring for customers, improving work methods and relationships within the business and with other stakeholders).
- Problems first: leaders create a culture where negative information is valued and problems are stripped of their blame component. By demoralising problems, leaders open up the possibility to learn and progress from the challenges the environment throws at the organisation and keep it evolving with its environment. Problem-based learning is the main way for adults to learn from their experience.
- Minds and hearts, as well as hands: dial down the dominance, increase involvement and make sure compliance doesn’t trump competence. Creating space to think and not just execute action plans is essential to motivation as well as mindfulness in how routine jobs are done. Seeking to understand what’s in people’s minds and how they feel about it is the ultimate key to productivity and innovation, as opposed to seeing employees as 'human resources' there to execute work that has been designed by someone else: the decisions coming from up high.
- Large changes come from continuous small steps: large-scale value-stream changes or innovations are built on capabilities, themselves grown through developing individual competence through mastering standard work and Kaizen. As middle management’s role shifts from one of ‘decide and staff’ to ‘instruct and improve’, improvements occur at team level, at department level, and opportunities for large-scale change appear and can be pursued with every one’s engagement and involvement, rather than by making executive decisions in the boardroom and rolling out.