Fighting Organizational Complacency

Tweet

NOTE:  This blog is moving.  Please read future posts at: http://leadingtransformation.wordpress.com

Applying lean requires a significant shift in thinking for most of us.  One aspect that I have found to be particularly difficult for people is the notion that anything less than perfection is acceptable. There seems to be a natural tendency to accept that things are good enough - and when people in the organization reach this point, complacency sets in and the improvement process begins to die.

One of the warning signs of organizational complacency is a passive resistance that shows up in statements like, "we can always improve, but . . . "  The "but" is the tip off that a person does not truly feel things can get much better.

Believing Your Own Press

Over and over again, I have seen periods of significant improvement followed by a return to mediocrity fueled by a belief that the most significant problems facing the organization have been solved and further improvement is not necessary.  In one instance, I worked with an organization that, over a period of several years, achieved marked improvement in product quality while increasing inventory turnover fivefold.  As the company became recognized as the industry leader, however, arrogance began to creep into its culture - which was not surprising given the remarkable turnaround that occurred during the previous period.

As is often the case, the arrogance was accompanied by complacency, and signified that people were satisfied with the current level of performance.  Within two years, the company's improvement efforts stagnated as inventory levels increased, quality declined, and profitability suffered.  The CEO who led the company during the period of growth (and was since promoted to a higher position within the parent company) returned to the organization to re-establish a continual improvement mindset.  After several years, humility and a drive for perfection began to return to the culture.

Some of the articles on the problems faced by Toyota a few years back point to organizational complacency as a potential cause.  Although much of the accelerator issue was eventually blamed on driver error, the company's rise to number one in such a short period of time, along with the significant increase in stock price, caused a loss of focus and made it difficult to maintain the motivation to improve.  Recognizing this as a problem, Akio Toyoda has said on several occasions that the company's future success requires a return to the basics - something that, at least from the outside, it seems to be working.

Perfection is the Only Acceptable Result

People in companies that appear to sustain the process over long periods of time tend to exhibit an obsession with improvement.  The drive to improve is integrated to the point where any resistance to change is quickly identified and repressed to prevent it from creeping into the culture.

As written in a previous blog (link), the notion behind the use of the term countermeasures rather than solutions is meant to keep anyone from thinking that there is an end to improvement efforts.  When the goal is perfection, there can be no such thing as a “solution” to a problem.

Continually striving for perfection can be tiring, so it is important to celebrate successes along the way.  While recognizing achievements, however, it is important that everyone understand that achieving and sustaining success requires never letting go of the idea that perfection is the only acceptable result for the company.  And a culture that continually strives for perfection has no room for the word, “but.”

Batching or Single-Piece Flow?

Tweet

NOTE:  This blog is moving!  Please read future posts at http://leadingtransformation.wordpress.com

One critical aspect of lean thinking that many people have trouble grasping is the importance of moving from batching to single-piece flow.  After all, if improving productivity is one of the things we're ultimately trying to achieve, isn't batching the most logical choice?

WHY WE THINK BATCHING MAKES SENSE

If we're striving for higher efficiencies within an individual step of an operation without regard for the effect on the overall process, then batching tends to make sense.  In fact, batching is a common practice in so many organizations today because of a fragmented approach to setting goals that forces people to maintain an inward focus to improvement.

When following a systems thinking mindset, on the other hand, it becomes clear that local ideas for improvement need to be evaluated - before they are implemented - as to whether or not they result in improvement to the organization.  And in the end, isn't organizational improvement what we're ultimately after?

Although batching often appears more efficient than single-piece flow for an individual task, the practice tends to create waste for other parts of the organization that more than offset the perceived benefits.  Some of the wastes that result from batching include:

• increasing the time between spending money in a process and receiving money from customers due to an increased overall cycle time and inventory that is not yet sold;
• waiting and downtime in one or more steps of the process while previous steps complete work on multiple units;
• larger amounts of inventory between process steps to reduce the likelihood that one step will shut down while waiting for a previous step to complete a batch;
• increased rework and delays when a defect is discovered that affects an entire batch of work rather than a single unit;
• increasing the time required to implement a design improvement because of the need to use up a larger  amount of inventory.

A dilemma commonly associated with a batching mindset is determining the the optimum batch sizes.  It is very likely that the "best" quantity to run for each step in the process will differ, resulting in further increases in inventory throughout the system.

IS SINGLE-PIECE FLOW ALWAYS POSSIBLE?

There are situations where batching is more cost effective because of limitations resulting from tooling, equipment, technology, or process design.  Although producing work in batches under these circumstances may be the most logical and cost-effective choice today, it should never be considered acceptable into the future. Batching must be considered a countermeasure until the process can be improved to the point where single-piece flow (or smaller batches) can occur.

Whether applying lean to a manufacturing process, administrative operation, or drilling gas wells, it is important to understand the effect that batching has on process flow, operating costs, and overall competitiveness of the organization.  To do this requires a systems thinking mindset, as well as a deep understanding of the process and the needs of the customer.

As long as people are evaluated on objectives that are not carefully aligned throughout the organization or do not clearly support high-level objectives, batching will appear to be preferable to single-piece flow.  Like many other aspects of lean thinking, trying to move to single-piece flow before transformation of leadership has occurred will most likely result in frustration among team members and disappointing results for the organization.

Lean Success? Not Without Patience

Tweet

This blog is moving!  Please read future posts at http://leadingtransformation.wordpress.com 

It's no secret that virtually all lean deployments fail to achieve intended results. One of the main reasons for this is a lack of patience in the time and effort required for transformation.  Success with lean requires a long term commitment to learning, consistent focus, and patience.  If the company's leaders are not in it for the long-haul, it's probably best not to start the journey.

The Cambridge Dictionary of American English defines patience as the ability to accept delay, suffering, or annoyance without complaining or becoming angry.  When applied to business business, patience refers to the ability to accept delays, setbacks, and periods of doubt without abandoning a chosen direction.  Although there will be benefits along the way that will make many people feel good about progress, there will also be bumps in the road that will make some question whether lean is worth the effort.

Make no mistake that a company will never be "lean." The best you can hope for is to get to the point where continual learning and improvement become so engrained in the culture that lean thinking does not appear to be anything out of the ordinary.  There will always be a need for coaches and commitment to maintaining - even staunchly protecting - the culture because the natural tendency for things to return to the "old way" will never go away.

It may seem strange that the road to continual and rapid improvement requires patience but it's true.  And unfortunately, patience is one characteristic that is sorely missing in Western business.