Protecting a Lean Culture Does Not Happen by Accident

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There is very little debate about the importance of culture to an organization's success, and that the responsibility for defining the culture lies with leaders. Once the culture starts to develop, though, how do you hold the gains and protect the natural tendency to fall back to the way things were before the improvements? The easy answer is that the responsibility belongs with leaders, but that does not provide enough detail to be of any use. Unless there is a clear and standardized system to protect the culture, including the methods, policies, and ability to identify new and existing gaps, the chance of backsliding is pretty high.

The culture needs to be protected by those who have the power to ensure that, among other things, leaders are fulfilling their responsibilities effectively, people are developing adequately, new hires are carefully selected and have values consistent with the those of the company, and people are being promoted for the right reasons. One team that is regularly involved with many of these areas and can ensure that they are done consistently and in a way that strengthens, rather than weakens, the culture is human resources. A strong HR team is in the best position to understand the company's culture, develop systems that protect it from damage, and help people understand the importance of following the associated standards.

AN EFFECTIVE CULTURE DOES NOT HAPPEN BY ACCIDENT

It takes a lot of work to define and create the type of culture that will help drive continual improvement and improve competitiveness. Once an organization starts making progress, however, it is very easy to slip back into old ways. Unless decisions related to hiring, promoting, and developing people are made consistently and in a way that is clearly aligned with the company's needs, the gains can easily disappear. The way to prevent this from happening is to develop standards that assure work activities protect the culture and assure that people-related decisions are made by a team that is independent with respect to personal relationships and can make objective decisions regarding a person's cultural fit or readiness for promotion.

Unfortunately, many human resource departments do not consider protecting the company's culture as a prime responsibility – or a responsibility at all. A quick Google search on the objectives of human resources identifies a lot of general statements like hiring, maintaining employment records, and providing counsel about terminating employees. Although some of these are loosely connected to protecting the culture, none that I could find mentioned it specifically. Among the likely reasons for this is that HR teams rarely have the power to challenge attempts by executives to avoid the standards. Also, like other parts of the organization, HR professionals are so busy doing their "day jobs" that they rarely step back to understand the fundamental reasons for doing the things they do.

Standards need to be designed to protect and embed the culture and, like any standard, if one person is allowed to bypass them, it will deteriorate and any protection it provides is lost. As a result of this, things move back toward the prior state and the organization's culture loses its ability to provide a competitive advantage.

WHY PEOPLE BYPASS THE STANDARDS

Bypassing the standards that protect the culture are often justified with good reasons, like needing to make a hiring decision quickly before losing a candidate or a leader promoting someone with whom he or she has worked in the past, so the person's capabilities and values are "already known." Regardless of whether the reasons appear sound or not, it is up to leaders to do their part by committing to the standards and following them every time. It is far less damaging to lose a potential candidate than to ignore a standard, go around the system, and hire someone who is not a good fit for the organization.

WHAT TO DO

Talking about the importance of culture will do little to protect it from damage. Effectively protecting it can only occur when the elements become standardized and embedded into the company's normal operation. Specifically, this requires:

1. Developing standards for the cultural dimensions of an organization, including hiring, promoting, training and development, etc.;
2. Making everyone aware of the standards, including what they mean to day-to-day business, and holding everyone responsible for following the processes (or ensuring that countermeasures are implemented when the standards cannot be followed);
3. Clarifying to the HR team that they have a responsibility to protect the culture by communicating and assuring compliance to, and continually improving, the associated standards (this may require development of HR team members);
4. Giving the HR team the power to enforce the standards in all instances;
5. Adding HR positions to job rotations to help key people develop a deep understanding of the standards, systems, and processes, including why they are critical to the organization's competitive position.

This does not mean that HR is the only team responsible for assuring the culture is protected. Everyone has the responsibility to follow the standards in a way that assures protection and continual improvement toward the ideal. What is does mean is that, as the official guardian of the culture, HR is responsible for many of the associated standards and has the authority to stop anyone from going around the system.

There are, of course, standards that protect culture and are not controlled by the HR team, including keeping the vision alive and relevant, helping team members make problems visible without fear, developing team member abilities to see and address problems, etc., but even these can be aided by support from HR to help leaders develop and improve the ability to make these things happen effectively.

THE ULTIMATE RESPONSIBILITY

Everyone in the company is busy working and improving their part of the system. Identifying and protecting a culture, however, applies to the entire system and requires focus from a team that has the ability to step back to think and act holistically. It is not as easy as many of the responsibilities normally associated with HR but is arguably the most critical.

When you think about it, it is not the products, services, or processes that make a company great, it is the people who develop, produce, and improve them. Without a culture that drives continual learning and lets people use their talents to create great products, services, and processes, the company has little to sustain its success. Talking about the culture does nothing – defining it in clear terms and implementing the systems that identify the gaps and protect the gains is the way to turn a soft, difficult to measure organizational element into something much more concrete.

Identifying Proper Leading Metrics

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One of the areas of lean that people tend to have difficulty grasping is the relationship between leading and lagging metrics, and how to identify effective leading metrics. People spend a lot of time attempting to determine leading indicators that, in the end, are often disconnected with any of the actions being taken to improve performance. 

Leading and lagging metrics both have a role to play in improving performance and are not difficult to identify once you understand the process and how to properly connect them to the problem-solving.

LAGGING METRICS

A lagging metric measures the result of a process. Barrels of oil produced, total recordable incident rate (TRIR), warranty expenses, and production costs are all examples of lagging indicators because the activities they measure have already occurred. The result lags the activity being measured and, whether you are happy with the result or not, you can't do anything to change it. 

Lagging indicators are important because they tend to represent what's important to the area being measured. They measure a result we are ultimately trying to achieve and help us determine if our efforts were successful in meeting targets.

Other examples of lagging metrics include on-time delivery, actual capital expenditures, defect rate, and customer satisfaction. Identifying them requires a clear understanding of what the business or team is ultimately trying to achieve. 

LEADING METRICS

A leading metric is a measure of an activity that influences a lagging metric.  As a measure of an activity being performed by a team, leading metrics can be influenced by the team in an effort to improve the results of a lagging metric. 

As an example, suppose a team is trying to improve safety performance as measured by TRIR and, through a breakdown of past incidents, discovers that hand injuries represent the largest category.  After breaking down the problem, the team determines that incorrect use of tools is the most likely cause and failing to wear gloves is increasing the severity of the injuries.  As a way to reduce the number and severity of hand injuries, the team introduces regular training sessions and an audit process to help assure team members are using proper tools and gloves.

The team can now create a dashboard that measures like TRIR (lagging metric), injury type (lagging breakdown), hand injuries (lagging metric), training classes held (leading metric) and audit results (leading metric).  By following these leading metrics, the team is assuring that the activities to improve safety are happening and that they are truly reducing hand injuries. 

In the above example, the effort of identifying the leading metrics did not consist of an isolated brainstorming session attempting to identify a specific metric to follow.  It was integrated with the problem-solving process and became nothing more than identifying a measure of the actions taken to eliminate a root cause of the problem.

KEEP IT SIMPLE

The problems people have related to identifying leading metrics often result from failing to connect the effort to problem-solving.  Attempting to determine the proper leading metrics in isolation from problem-solving often leads to frustration and wasted effort in creating and maintaining the measures, and a lack of clarity in understanding how to improve performance of lagging metrics.

Lean Requires Deliberate Action

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It has been decades since we first learned about the Toyota Production System and how it contributes to the company’s quality, productivity, and competitive success.  And although some companies have done very well with lean, most have struggled.  There are many reasons for failed applications of lean, but one that gets very little attention is the notion that lean thinking has no room for generalizations when it comes to performance improvement.  Objectives must be clear and deliberate, and include appropriate plans and measures to assure success.

BEYOND THE VISION

While vision statements are sometimes directional and somewhat general, turning them into action requires clarity around expectations, including short- and long-range objectives in order to make them a reality.  In fact, one of the problems related to visions is that many lack sincerity and do not progress beyond the development of creative slogans and posters.  Within a lean thinking environment, a vision is a serious and deliberate commitment of what the organization expects to be in the future.

I once worked for an organization that determined its vision to be Clearly the Best!  This could be thought of as a general, feel-good slogan if it did not progress beyond creating the statement, but the leadership team that developed the vision spent the time to create a common understanding of what it will mean to be the best.  They rolled it out to the organization with a picture of where they needed to be ten years out, and specifically what needed to be achieved within the next 3-5 years, including:

• A Total Recordable Incident Rate (TRIR) of 0.45
• A 30% reduction in warranty claims
• On time delivery to promise date of 99%
• A 25% improvement in product development cycle time

By aligning the 3-5 year objectives with becoming clearly recognized by customers as the best, the team turned a generalization into deliberate objectives for the future.  Because competitors and customers did not remain static, the team was required to adjust its idea over the years of what it means to be the best, but it was always clear about what it meant at any given point in time.  Achievement of an objective usually meant setting the bar even higher to keep it moving even closer to the vision.  [It should be noted that the company’s mission was very clear which greatly helped the process by providing boundaries for the vision.]

ASSURING ALIGNMENT

In the above example, by creating specific long-term objectives, the team was able to quantify the milestones that needed to be achieved along the way to becoming the best.  Leaders mobilized the team around these objectives, resulting in plans and dashboards that monitored progress along the way.  Additionally, they provided opportunities for leadership development and coaching that proved invaluable for sustaining the gains.

If the vision is kept alive year-after-year by developing associated long-term objectives, it becomes much easier to assure that actions – from annual plans to daily problem-solving – are aligned and focused on continually closing the gaps between the present and the future.

Consider the following vision statements:

• To be recognized as a trusted partner by customers, communities, and suppliers in all areas we operate;
• We will be the leader in researched-based education;
• To consistently provide products that make life healthy, exciting, and rewarding

 It is easy to see why these statements were created but unless they are associated with long- and short-term objectives, they are not deliberate statements about the future.  Developing the vision is important, but it must constitute a serious commitment and be followed up with deliberate actions and measures to prevent the exercise from becoming futile.

Are We Happy With Mediocrity?

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“Nobody gives a hoot about profit.  I mean long-term profit.  We talk about it, but we don’t do anything about it.” – W. Edwards Deming

W

hy do so many companies seem to be happy with mediocre performance? People generally consider the idea of having it all – perfect safety, high quality, short cycle times, low costs – as something that is impossible to achieve.  As a result, the bar is set low and everyone feels good when the low targets are achieved.

So often, it is our experience that interferes with moving to the next level of performance. We don't set aggressive targets because we know they are impossible to achieve and, in the end, we don't want to be disappointed or suffer the consequences of missing a target. As a result, we trudge along with average results and view many problems as inevitable or out of our control. If we're lucky, our competitors operate in the same mode. If not, we fall further and further behind until we are either acquired or forced to close our doors.

Energy Can Be Created and Destroyed

A group-wide acceptance of problems as inevitable is what causes people to lose their energy and inspiration. When one views significant improvement as impossible, intrinsic motivation wanes and extrinsic motivation – e.g., compensation – dominates. And the longer this type of “it happens” mentality continues within a company and the more deeply engrained it becomes in the culture, the more difficult it becomes to change course.

Leaders can stop or prevent mental mediocrity by first realizing that their own behaviors and the systems they created may at the root of the problem. It's not necessarily easy to do, but letting go of some traditional beliefs and methods of management can begin to drive the type of change that can energize improvement efforts and give people the confidence that they can have it all.

To do this first requires that leaders believe that problems are not inevitable and that the company has the ultimate control over its own future. They must fundamentally believe that they can have it all.

Stretching Without Breaking

Leaders have to trust that the people in the organization possess the talent to successfully tackle the difficult problems facing the company. They must often develop this ability, though, by stretching people and encouraging them to accept challenging projects and targets, and coaching them in their efforts to succeed. People won't always be successful in achieving the target (if they are, they're probably not being stretched enough), but the learning and development that occurs with each project is invaluable to tackling future problems and opportunities.

A stretch target refers to a target that is difficult, but not impossible to achieve and, although you can't stretch people all the time, you've got to make sure there is enough tension within the organization to keep people developing and the company's performance improving.

Getting people to accept stretch objectives assumes that they will not be penalized for missing a target. Reward systems need to support development and participation in stretching the organization rather than merely meeting a target. If you encourage people to stretch but continue with a reward system based on meeting targets, nothing will change. People will continue to pursue safe targets and push back on any attempt to stretch. In the end, mediocrity will reign.

More often than not, organizations cause their own problems. The effects of problems caused by the external environment tend to pale in comparison to those created on the inside. Understanding and accepting this, however, often requires a shift in thinking toward the idea that mediocrity is unacceptable and that the organization can, and will, have it all.

When Lean Fails: The Common Causes

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Many companies today are jumping on the lean bandwagon and expecting huge cost reductions as a result.  Unfortunately, many of these companies will never see the type of improvements they expect from lean, and their leaders will likely become disappointed and frustrated, and eventually abandon the effort.

There are a number of reasons companies fail with lean.  What I present here are the causes I’ve seen over the years that are the most destructive and the most difficult to resolve.  It is important to understand these causes and work to prevent or address them early in the process in order to initiate the type of transformation that will lead to a more competitive and stronger organization in the long run.

1.       Underestimating the Transformation
Most leaders tend to underestimate the level of transformation required to create a lean thinking culture within the organization.  Lean is not something you “implement” or use when convenient.  In virtually all cases, it involves a dramatic shift in the culture to drive a new way of thinking and approaching work.  As such, it requires transformation in the systems for leadership, training and development, recruiting and hiring, promotions, and others before one can expect to see results that have any chance of being sustainable.

2.       Delegating the Effort
One of the major differences between lean and improvement methodologies like six-sigma is that it requires the involvement of the organization’s leaders to be successful.  As noted above, lean requires a fairly significant transformation in order to be successful and this can only be done by those at the top because they are the people who are in the position to make it happen.

3.       Humility
Arrogance is one of the biggest killers of a lean culture.  Built on the Plan-Do-Study-Act (PDSA) cycle, lean is about continual learning.  I have seen many organizations over the years that had started well with the effort but, after a few early successes, became overly confident and killed the transformation.  The saying that the man who is too big to learn will get no bigger applies to organizations as well as individuals. 

The most effective leaders I have worked with are those who accept responsibility for the organization’s problems and realize that it is they who need to change in order for the organization to change.

4.       Patience
The extent of change in systems and behaviors required to be successful with lean takes time to achieve.  Although there will undoubtedly be early successes, the ability to sustain the successes and drive others will not happen without continual effort to shift thinking.  Especially when a crisis occurs, people will go back to their comfort zone, which most likely involves how they behaved before learning about lean.

The key is to never let up by continuing to reflect and drive change through the conversations and actions that occur every day.

5.       Consistency
Lean requires clear alignment from the organization’s purpose to the work performed by people every day.  In order to achieve and maintain this alignment, the organization must have a clear and constant purpose that is motivating and well understood by everyone.  Doing this well requires a significant amount of effort by the leadership team – especially during bad times when many organizations find it easier to abandon the purpose in order to maintain profits and short-term goals.

Leaders must be enlightened enough to understand that, although success will not come easy, it is possible to transform the company into a stronger and more successful organization.  Looking out for the causes of failure can save a lot of frustration early in the process and greatly improve the chances for success. 

Did Ohno Miss Something?

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“The basis of the Toyota production system is the absolute elimination of waste.” – Taiichi Ohno

Every now and then, I like to go back and reread books I’ve read in the past to be reminded of important points that I’ve either forgotten or just missed the first time around.  This is particularly true of books by, or related to W. Edwards Deming, Peter Drucker, and Taiichi Ohno.  Recently, I reread Ohno’s The Toyota Production System: Beyond Large-Scale Production.  Each time I read this book, I get a better understanding of the thinking behind the development of TPS, including how I can address a number of organizational problems I face that I’ve been unable to resolve.

This time around, though, there was one point that kept coming up and I couldn’t get past.  Throughout the book, Ohno repeats the idea the TPS is completely about eliminating waste.  The issue I had with this is that, in my experience, people who focus lean efforts only on waste tend to get overly focused on the tools and end up working a number of disconnected problems that result in little sustained improvement.

A more subtle message in the book that I don’t believe gets as much attention as the elimination of waste is the challenge that Kiichiro Toyoda put forth regarding the need to “catch up with America in three years.”  Ohno writes very fondly about Toyoda, including how important he was to Japanese industry and the development of TPS.  He credits Toyoda’s statement as being inspirational, but rather than being the drive for the development of TPS, translates it into a call for the elimination of waste.

So Much More than Waste

Perhaps Ohno’s view of waste is more complex than most people can truly comprehend, but I think that the message of using lean to reduce waste has gotten so watered down that most companies fail to achieve the big gains that a true transformation can achieve.

When the focus is waste reduction, lean can easily become a toolbox to reduce costs.  In my experience, every organization that turns its lean effort toward cost reduction fails to sustain the improvements and eventually drops the effort when something else draws its attention.

I contend that the focus of lean should be the company’s vision.  This assumes that the organization has a vision and that it’s truly inspirational.  In Toyota’s case, the vision was to catch up with America.  Other companies that have been successful with lean tend to have equally inspirational vision statements.

Deming said that a company’s vision is a value judgement and must include plans for the future.  This means that it includes much more than profits or share price.  It must relate to providing better and better value to the company’s stakeholders, including customers, employees, suppliers, the community, and shareholders.  It is the focus on improving the value to all stakeholders to a level never before achieved (or even conceived) that provides inspiration. 

When the organization has a clear statement that inspires people, lean becomes the vehicle to make it happen.  It provides a method for everyone in the organization to align efforts and work together to drive sustained and never-ending improvement.  The effort begins with the vision and translates it into more and more detail as it works through the company’s long-term objectives, annual plans, dashboards, meeting rhythm, and daily problem-solving. 

It is through the alignment of these efforts, beginning with a clear and inspirational vision, that lean enables innovation and an obsessive focus on closing the gaps that are truly important to the organization.  And when lean efforts are anchored by the vision, people will not be distracted by the numerous management fads that can derail the effort.

What Did Ohno Mean?

We’ll never get inside of Ohno’s head to understand whether or not the vision of catching up to America in three years is what truly inspired the development of TPS.  It is only my interpretation that the vision is what leads to sustained gains and what drives lean at Toyota.  Perhaps I’ll see this more clearly the next time I read the book . . . or perhaps I’ll find something else I completely missed this time.

Is it Better to Work on Strengths or Weaknesses?

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It takes far less energy to move from first-rate performance to excellence than it does to move from incompetence to mediocrity. – Peter Drucker

Throughout my career, I’ve put a lot of effort into overcoming my weaknesses.  As a result of coaching and reading numerous books and articles on self-development, I have always viewed my weaknesses as barriers to success and something that I needed to work hard to overcome.  I’ve recently begun to wonder, though, whether focusing too heavily on my weaknesses took time that could have been better spent developing my strengths.

In The Effective Executive, Peter Drucker wrote that, by focusing on our weaknesses, the best we can achieve is mediocrity.  On the other hand, working to further developing our strengths can result in greatness.

Most people excel in the areas that motivate them.  Alternatively, weaknesses tend to come from the things in which people are not really interested.  Focusing attention on developing the things people either can’t improve or aren’t interested in improving can lead to frustration, stress, and an overall lack of motivation.

People are motivated when they are able to do meaningful work, learn and develop, and have fun.  And continually developing in an area of strength and utilizing the strength to contribute to an organization’s success help make this happen.

Addressing the Organization’s Weaknesses

It is obviously important to understand and continually close the critical skill gaps that exist within an organization.  Doing this effectively requires hiring the “right” people and continually making them “more right.”  One of the critical objectives of hiring is to put together a team where individual strengths complement one another and people are able to effectively cover each other’s weaknesses, but focusing the hiring process on minimizing the organization’s weaknesses, however, will never lead to greatness.

The performance review process in most organizations targets an individual’s weaknesses.  Although strengths are usually identified – although more in terms of results than the fundamental strength that led to the result – the individual is often expected to work on the weaknesses before the next review.  There is rarely conversation about how the person can further develop strengths during the coming year.

Knowing Your Strengths

Developing your strengths assumes that you know your strengths.  For most of my career, I have approached people and asked for feedback and coaching about my work, interactions with others, and overall performance.  Whenever I have these conversations, however, I try to get the other person to talk about the areas in which I need to improve – in other words, my weaknesses.  Lately however, I’ve tried to turn the discussion around and have asked for feedback on my strengths.  What I’ve found is that it puts the other person much more at ease and comfortable giving me the feedback I need to improve.

Although this has helped improve the conversation, I have found that it is important for the other person to know that I’m not looking for compliments.  I am looking for feedback on my areas of strength where, if I got even stronger, could greatly help the organization and my own career.

Like anything, this type of conversation takes practice to provide real value, so it is important to stick with it and be consistent about holding the meetings.

PDSA to Understand & Develop Strengths

To better understand strengths and weaknesses, Peter Drucker suggested writing down goals related to a specific objective or project.  After six months or so, he recommended returning to the list and reflecting on which goals were achieved and which were not.  After doing this over a period of time, a picture will start to emerge that identifies strengths and weaknesses.  In addition to showing strengths and weaknesses in execution, it will show how strong the person is in planning and selecting the right things on which to work.

This is closely aligned with W. Edwards Deming’s Theory of Knowledge and the Plan-Do-Study-Act (PDSA) Cycle.  Within a PDSA mindset, learning only takes place when the hypothesis is clear, which means that the person or team clearly and consciously understands the expected results from a given action or plan.  I believe Drucker’s advice deals with applying PDSA on a personal level to drive learning.

For this approach to be successful, I believe that the list must be remain personal.  As soon as something like this becomes public or part of a person’s performance review, there will be a tendency to skew results and show more success than really occurred and, as a result, interfere with reflection and learning.  Most organizations are not mature enough in their thinking for people to be truly open about their performance and, in particular, their weaknesses. 

It’s Not All or Nothing

Focusing on your strengths does not mean completely ignoring your weaknesses.  This is not about developing knowledge or a particular skill.  It is about using knowledge and skills to be successful.  If you have a weakness that is interfering with success, the more you know about it and address it, the more successfully you will be.  The key, though, is to avoid spending significant time overcoming a weakness.  Once it is addressed to the point where it no longer interferes with using your strengths to be successful, stop worrying about it and refocus on your strengths.

Confidence and Humility: Two Critical Leadership Characteristics

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There are many traits that make one an effective leader.  Among the most important of these are confidence and humility, two attributes that many think cannot coexist in the same person.  I have found, however, that confidence and humility actually work together to improve the ability to lead and, although some people tend to possess these traits more naturally than others, they can be developed through effective coaching and feedback.

Confidence enables a leader to possess an unwavering commitment to purpose and direction of a team, while humility opens the leader up to continual learning.  And when defining confidence as self-assurance resulting from demonstrated capabilities, it is not possible to possess or have true self-assurance without the commitment to continual learning.

CONFIDENCE

W. Edwards Deming listed constancy of purpose as the first of his 14 points for effective leadership and lack of it as a deadly disease or barrier to improving business performance. Without clarity and confidence in the purpose of a business, a leader and/or those within the organization will continually question the direction and continually jump to the issue of the day resulting in very short-term, if any, success.

Confidence resulting from true abilities and understanding of the business, on the other hand, can give the leader the assurance that the purpose is correct, and prevent the daily distractions from taking the organization off course.

Another aspect of confidence is the belief that developing the abilities of team members is not a threat to the leader’s power or position, but a necessity to maintain it successfully.  A confident leader makes developing people, including the next set of leaders, a top priority for the business. 

Many people tend to confuse confidence and arrogance.  The characteristics of confidence that make it a vital leadership trait are not present in ones who display arrogance.  Discussions that include condescending remarks, as well as an overall lack of focus on developing others are clear signs of arrogance rather than confidence.  Conveying negative energy, a lack of openness to questioning of decisions and actions, and overall uncomfortableness are other characteristics of arrogant leaders.

Basically, people want to be around confident leaders but will do whatever they can to avoid arrogant ones.

HUMILITY

As mentioned above, humility gives people the belief that there is much they don’t know and lead to the desire to continually learn.  Humility enables a leaders to comfortably use inquiry when attempting to investigate a problem or develop the skills of team members because they don’t worry about others questioning their knowledge or abilities. 

Leaders who lack humility have trouble with structured problem-solving because of the tendency to jump to the countermeasure without truly understanding the root causes of a problem.  The kaizen process only works when an individual or team go into it with an open mind and the realization that they don’t always know the answer.  To do this effectively requires humility.

WORKING TOGETHER

When possessed together, humility and confidence can drive leaders toward constancy of purpose for the area they lead, along with the PDSA mindset needed to continually adjust the approach to remain on course.  When the leader models these behaviors regularly, people will be more receptive to following him or her and adopting the same traits in their own work.

A Simple Method for Achieving the Vision

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“The best way to predict the future is to create it.” – Peter Drucker

Many companies today have vision statements that are well-written and effectively describe future organizational aspirations. One has to wonder, though, that as common as they are, and as long as organizations have been doing vision statements, why so many companies continue to have trouble staying focused and miss the mark. Rather than staying focused and driving toward the future, organizational ADHD takes over and the vision turns into a virtually meaningless slogan.

One of the biggest reasons for failing to achieve the vision is a lack of understanding and appreciation of what a vision can truly do for an organization. A vision should be carefully created around what the company is expected to become over the next 5-10 years (or whatever time period makes sense for the company). It must be meaningful and able to drive all planning and improvement activities for the organization. It is a deliberate aspiration for the company; not something to be used only when convenient.

A Simple Solution

Achieving the vision is a simple process of understanding where the company wants to go, where is currently is, and continually closing the gap between the two. Just because the process is simple, though, does not make it easy. Without keeping the approach simple – and frankly most companies do not keep it simple – there is no chance of making it successful.

This post is meant to address the how of achieving the vision rather than the what. There is a process for creating effective vision statements that some leaders have obviously done very well. The method covered here assumes that the vision statement is one that clearly and effectively describes what the organization wants to become in the future.

1. Define the Gap In the same way that a problem on the shop floor requires first to define the gap, achieving the vision requires understanding how far the organization is from the its ideal targets.
   Determining the gap involves breaking down the vision, which is often stated as a generalization, into specific 3-5 year objectives (which often include targets for safety, quality, production/schedule, and cost, although other areas can be covered). The objectives are regularly compared to current performance to determine the gaps that needs to be closed to move the organization closer to the vision.
2. Set Annual Targets The 3-5 year targets become annual targets for different areas of the organization. Individual teams create their plans to achieve the targets, keeping the leadership team in the loop throughout the year.  The annual targets are deployed through the catchball process to ensure buy-in throughout the organization and to give the leader confidence that those accepting the objectives understand the intent as well as the targets.
3. Establish Regular Meeting Rhythm There needs to be regular meetings to ensure: (1) the annual targets are being met; and (2) the organization is closing the gaps toward the 3-5 year objectives and ultimately the vision. The meetings are focused on problems in achieving the targets and closing the gaps toward the vision. The term rhythm is important here because the meetings need to happen on regular intervals based on the pace of the business. The key is to meet frequently enough to allow corrections to be made before things get too far off course.
   It is also important to remember that the rhythm meetings are not witch hunts. They are meant to ensure that problems are being handled effectively and to identify where additional help is needed. To keep the meetings focused, it is necessary to run them from the dashboards and only refer to the plans when needed to address a particular problem.  This keeps everyone focused on the same things, looking at the same data, and removes debate and confusion about where the problems lie.
4. Repeat the Process Steps 1-3 need to happen every year to keep the team focused on the vision and to make sure the gaps are closing effectively.

The above process is a method that successful companies have used to turn their vision from a generalized statement of hopes and aspirations into a deliberate attempt to create the future. Developing and communicating the vision, when done correctly, can be energizing and motivating for the organization. Without a process for making it happen, though, the motivation, as well as the improvements driven, will likely not last.

Should HR Make All Hiring Decisions?

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One of the biggest problems companies have that interferes with long-term success is variation in people, team, and leadership styles throughout the organization.  This variation wreaks havoc with the company’s culture and leads to a host of problems that directly and indirectly affects performance.

An organization’s hiring process contributes directly to variation in personality, values, and leadership style.  In most companies, the hiring decision is made by the manager to whom the person will ultimately report which often leads to hiring people who are a fit for the manager’s style rather than the style of the organization.  The manager also has a need that, depending on the pressure to fill that need quickly, may drive the decision to hire someone without proper consideration to alignment of the person’s personality and values to those of the organization.

This sounds like an exaggeration but it is something that happens every day in many companies.  Unless the organization has a clear idea of its desired culture and the DNA of its people, and has a method to screen candidates to assure a proper match, its chances of creating the desired culture are very small.

Let Human Resources Do It

Giving human resources the power to make the hiring decisions is not a very popular viewpoint.  People complain that the HR team does not have the knowledge to hire the right person and is too disconnected to the workplace to effectively carry out the process.  When looked at in light of the long-term cultural ramifications, however, centralizing the hiring process within the HR team begins to make sense.  Some of the reasons for this include:

• They touch all areas of the company and have a better understanding of the overall system than someone whose work is limited to a specific function;
• Having an independent team handling hiring ensures consistency across the organization. They can make sure that the decision is based on competency as well as a fit to the company’s culture, which can reduce the hiring of friends or making a quick decision because of an immediate need;
• It puts the responsibility of protecting the company DNA in one area that can continually close gaps in attempting to hire the perfect employee;
• Like any process, the more hiring is handled by one team, the better they will get at performing the process. When hiring is decentralized, managers across the company do it so seldom that they never really get good at it.

There are obviously some basic elements that enable a centralized hiring process to work effectively.  First and foremost, human resource professionals need to spend a significant amount of time at gemba connecting with teams and working to understand the problems the teams face on a daily basis.  One way to help this is to rotate team members into human resources assignments on a regular basis.  Doing this will help HR better understand the areas they serve as well as having those served to understand human resource systems and methods.

Another important requirement to ensure the success of the process includes having a clear definition of the organization’s DNA and an understanding of how well the process is performing in terms of screening candidates for the DNA.

Finally, centralizing the hiring decisions within the human resource function requires HR team members to be responsive to the needs of its customers.  Although it may take time to find the right candidates, the process must continue to move until the position is filled.

I am not a human resource professional but having faced the numerous problems caused by variation in the hiring process, I’ve come to the conclusion that centralizing it is the best approach for most organizations.  If culture is truly valued as critical to long-term performance, we should always be looking for better ways to create it in a way that provides a true competitive advantage.  The hiring process has such a large impact on culture that it is a logical place to begin looking to understand whether it helps or hurts the company’s efforts to improve.

A Solution Without a Problem

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“You are non-value added, Charles,” I was told. “Your sole job is to take care of the team member who is creating the value.” – Toyota Trainer to Charles Luttrell (from Toyota Culture: The Heart and Soul of the Toyota Way by Jeffrey Liker and Michael Hoseus)

One of the basic requirements for establishing an effective annual plan that many companies seemingly miss is a clear and consistent organizational purpose across the company.  Without clarity around why the organization exists, people will determine what is important based on their own perspective rather than that of the company, as a whole.  When this happens, it can lead to overloading people to the point where teamwork and performance is negatively affected.

Confusion around the purpose is what drives teams to create initiatives that may seem important to them but do nothing to help the company achieve its purpose.  The supply chain team implementing a new system for requisitioning material, the finance department changing the way expense reports are submitted, or process engineering installing robots on the shop floor are all examples of initiatives that may appear important to the teams driving them but can be unhelpful and disruptive to the teams working to produce products or serve customers.

What Problem Are You Solving?

When you get down to it, there are two basic jobs within an organization.  You either serve customers or help others serve customers.  Serving customers generally includes making products or delivering a service to end users – i.e., those things that generate revenue for the company.  Those who do this add value directly whereas everyone else delivers indirect value by helping those who deliver value solve problems and serve customers better.

Solving problems does not necessarily entail spending time and money on the latest technology or trend in the field.  It does entail spending time at gemba with those who provide value to understand their problems and find ways to help solve them.  Although it may involve implementing the latest technology, in many cases it does not.  It’s all about understanding and gaining agreement that a new project will solve problems and make life easier for those who provide value.  

When the purpose is clear to everyone in the organization, people will understand their roles and focus everything they do on improving the value the company, as a whole, provides.  Just as a company cannot hope to sell a product that customers are not interested in buying, a support function cannot hope to add value by selling a new initiative that its internal customers do not want.

I Already Do Lean

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“The first step is transformation of the individual.  This transformation is discontinuous.  It comes from understanding of the system of profound knowledge.  The individual, transformed, will perceive new meaning to his life, events, to numbers, to interactions between people.” – W. Edwards Deming

Facing resistance when introducing lean to an organization is common – and even expected.  Especially early in the effort, people will look at lean as a passing fad or not applicable to what they do.  A less common but just as destructive type of resistance put up by some people is that they already to lean.  Dealing with this excuse for opting out of the effort requires taking the time to understand whether it stems from fear of looking ignorant by needing to learn something new or if it is ego driven.

First of all, nobody “does” lean naturally.  Although some people have more of an inclination toward lean thinking than others, everybody needs some level of learning or coaching to develop it more deeply.  The conventional western approach to business over the last century runs so counter to lean that a deep level of reprogramming is necessary for most people.  The problem for those leading the transformation, though, is to convince those who already do lean that, although they may apply components of it to their work, the big gains from lean come when it is understood and applied as a system.

Telling these people that they don’t understand lean will only get them to dig in more deeply and further block the willingness or the ability to learn.  Helping people open up to learning about lean requires spending a significant amount of time with them to learn what they do and how they work, and using a questioning approach to get them to realize that lean encompasses far more than eliminating waste, and that they have much more to learn to realize its true benefits.  It can take a lot of time to do this but, in a way, it is like going to gemba for personal transformation because driving change cannot be done without connecting to those with whom you are working to change.

Clues to Form the Questions

Spending time with those who already do lean will provide clues as to where to begin formulating the questions and the approach to drive learning.  Some of the actions and practices to look at during the time you spend with the person include:

• Developing others is viewed as a high priority and there is clear evidence that it is actually being done;
• People on the team the person leads have a clear line-of-sight to the company’s vision;
• Interaction with team members is heavily oriented toward questioning to drive learning rather than advocacy and dictating orders;
• Problems are addressed using a structured approach rather than jumping to the answer;
• Decisions and actions are approached through the use of the Plan-Do-Study-Act (PDSA) cycle;
• People are comfortable openly reporting and discussing problems;
• There is a true connection to gemba that aids in setting team objectives and driving the type of support provided;
• The processes team members use to achieve results is emphasized just as much – or more – than the results themselves;
• The leader follows the same approach to addressing management or system-level problems as team members do for process problems;
• Team performance is increasingly more dependent on the system than the skills or personality of the leader.

There are obviously other areas one could look to for clues for driving the conversations with someone who already thinks they know lean, but the above are a good place to start.  The key for the person driving the change is to go to gemba with the people being coached to learn what they do, how they do it, and the type of results they are achieving.  The more information you have, the better you can direct your coaching and conversations toward getting the person to slowly lower his or her defenses and open up to learning.

Transformation Can Happen

It is very satisfying to see someone have a light bulb moment with respect to lean.  It is at this point when transformation begins and learning greatly accelerates.  Although some people will never open themselves up enough to truly learn, I have found that, as long as I’m willing to take the time needed and continue to learn and develop myself, I can achieve some level of progress with most people.

Innovation for the Sake of Innovation

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“Our whole company is founded on the principle that there is something very different that happens with one person, one computer.” – Steve Jobs

The May issue of Fortune Magazine included an article called, “Startups . . . Inside Giant Companies,” which presented the latest approach companies are using to drive innovation.  The article included examples of how companies like Coca-Cola, GE, and Tyco have implemented programs to drive innovation back into the organization.  As I read the article, I couldn’t help thinking here we go again – another management fad destined for the six-sigma scrap heap.

The author highlighted the systems companies are using to make their cultures more innovative by setting up internal startups to bring new ideas to market and rewarding people for new product ideas.  The approaches used by the companies include idea pitch parties, internal venture capital groups, and growth boards that award funding to the best ideas.  It was noted, for example, that GE now has 3,500 of its 300,000 employees now involved in the process and expects to increase that number to 35,000 by year-end.

Innovation Doesn’t Guarantee Success

The success of companies like Apple, Google, and Amazon has created an infatuation with innovation to the point of being distracting and detrimental to running the business.  Innovation is absolutely critical to the success of an organization, but it must be focused on improving customer service and addressing problems that interfere with achieving the vision.  Uncontrolled innovation leads to very creative ideas that distract people and result in square-peg results. 

The six-sigma thoughts that kept popping into my head while reading the article were related to the black-belt who grabs the glory for “solving” a problem while those who participated in the effort – and did much of the work – get little or no recognition.  Those dealing with the problems on a daily basis are also shown by management that they are not respected enough to be taught how to solve problems on their own and that it takes a special person to stay focused and find solutions.

I can’t help but think that the same thing will occur within many of the companies listed in the article.  As the people with the ideas are applauded and rewarded by leaders, those left running the business – and dealing with numerous problems on a daily basis – are largely ignored and shown that what they do is not important. 

Another potential distraction caused by the heavy focus the referenced companies place on innovation projects is that, by touting the number of innovation projects, people and teams will start putting forth weak and unclear ideas just to raise the numbers.  If company executives focus on the numbers, team leaders will start padding the numbers to make themselves look better.

Aligned Innovation

What truly innovative companies understand is that innovation must be ultimately focused on serving the customer.  On the production line, Toyota removes the doors after painting because it allows team members to move in and out of the car quickly and easily and keep up with takt time.  This is an innovation that addressed a problem of keeping up with increased demand.

When it comes to new product development, Apple seems to understand this concept better than pretty much anyone.  Following the purpose of one person, one computer, Apple seeks to understand its customers at a fundamental level rather than merely a product level.  Customers generally do not know what is possible, so merely asking them what they want will lead to information about the products and services they are currently receiving.  If asked what they wanted with personal computing, though, customers would have probably responded in terms of their laptops.  Focusing on the one person, one computer purpose, though, Apple dug deeper to understand problems people have every day that could be addressed by having a computer with them everywhere they go.

Whether process or product innovations, the key is to understand how they address problems for the internal or external customer.  Cool ideas mean nothing unless they help the address problems.  When the effort is controlled by focusing it on the company’s purpose, the creativity of people can be released in the right direction resulting in far greater success with new products, processes, and services.

Breaking Down Silos

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“What we need to do is learn to work in the system, by which I mean that everybody, every team, every platform, every division, every component is there not for competitive profit or recognition, but for contribution to the system as a whole on a win-win basis.” – W. Edwards Deming

One of the most important aspects of lean thinking that is often underemphasized or ignored altogether is the catchball process.  Catchball is critical for calibrating the focus and efforts of everyone to assure that people don’t lose sight of what the organization is trying to achieve and how they contribute to its success.

Without catchball objectives tend to become fuzzy, the focus of people and teams turn inward, and teamwork breaks down.  Although not necessarily an easy process, the benefits associated with effective catchball are significant.  The discussions that occur throughout the process become the magnet that pulls the team together and focused on achieving the organization’s vision.

Vertical Communication

The most common application of catchball is a series of discussions that take place between leaders at different levels of the organization to assure objectives are understood, aligned, and achievable.

During catchball meetings, the leader assures that annual objectives are understood and accepted by those on his or her team.  In many cases, an objective will be a stretch for the person involved in the discussion, with the dual purpose of moving the organization forward and developing the person’s problem-solving abilities.  Particularly for a stretch objective, it is made clear that the leader will provide coaching throughout the effort.  This helps assure that the objective becomes the responsibility of the person to whom it is assigned as well as the leader doing the assigning.

The discussion is also an opportunity for the team member to express concerns about the objective, given other priorities for the team.  The leader must be ready to discuss priorities and resources during the conversation. 

Openly and sincerely discussing the specifics of an objective with the people and teams is vital to assure that those involved buy into the intention of the objective rather than approaching it as a check the box exercise.

Horizontal Communication

One of the less common applications of catchball is the discussion that takes place between functions to assure support and alignment of objectives is clear.  It is all too common for support functions to set objectives and determine priorities in a vacuum, and focus on what they consider to be important rather than what their internal customers need.  Given the fact that people want to do a good job and consider what they do to be important, this is perfectly understandable.  Establishing horizontal catchball discussions is vital way to assure that the energy and expertise of everyone, especially those in support functions, is directed toward the organization’s highest priorities.

When the company’s purpose is clear, it is easy to determine which areas support others.  In a company that manufactures products, for example, everyone’s work should be oriented toward production – meaning that the factory is the focus.  Even those developing new products need to understand the problems in the factory to assure that new designs are producible.  In an oil and gas operation, the focus is the producing asset; and in a service operation, it’s the point where the service is delivered to the customer.  The key to assuring that everyone is focused on the same priorities is being absolutely clear about the company’s purpose.  This helps people understand who they support and who supports them.

Horizontal catchball discussions focus on assuring that objectives are clear and that the needs between areas and functions are understood.  Although it is the responsibility of a support area to remain abreast of advancements within its area of expertise, efforts should be oriented toward meeting needs of those the area serves rather than forcing new and exciting developments on them.  With that said, however, as with external customers, internal customers don’t always know what is possible or what will help them improve, so the catchball discussions should include explaining new developments and understanding whether or not they can help address problems in the short- or long-term.

Assuring Catchball Success

Like much of lean thinking, catchball is simple but not easy.  The formal effort should take place over 2-3 months but, in reality, includes discussions that occur throughout the year.

The process runs counter to traditional management in that it puts just as much, if not more, of the responsibility for success on leaders.  Leaders must be closely connected to gemba to know the capabilities of the team, including the extent of stretch that they are able to accept.  It also requires the ability to coach effectively and continually help people understand the connection between the work of the team and the company’s long-term objectives.

By defining, standardizing, and continually improving the process, catchball can become an extremely valuable element of the annual planning effort.  The better the organization becomes at catchball, the more the energy and efforts of people becomes redirected from working against each other to actually uniting toward a common purpose that results in a win for everyone.

Is it Too Easy to Fire People?

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“I am convinced that nothing we do is more important than hiring and developing people.  At the end of the day, you bet on people, not on strategies.” – Lawrence Bossidy

How effective is your hiring process?  How do you know? If it was difficult or impossible to fire people after you hired them, would it change your process?

If it was a given that every hire would stay with the company until retirement, most companies would likely change their hiring practices.  The fact that we are able to fire people fairly easily, though, allows us to worry less about the effectiveness of the process and distracts us from addressing the real issues that affect long-term performance.

The objective of the process should be to recruit and hire people who have the right skills, are a good fit with the company’s culture, continually learn and develop, meet or exceed performance expectations, and stay with the company until retirement.  When this is understood, people begin to see that, whenever someone is fired or quits, the process has failed and the effort to find a replacement is rework.  The time and cost associated with dismissing an employee, and recruiting, interviewing, orienting, and training a new one is waste and would not have occurred if we hired correctly in the first place. 

Although a rather blunt way of looking at the issue, a company that truly wants to be the best has to hire the best; and “best” means those who meet the objectives described above.  Hiring is one of the most critical processes for a company, yet it is rarely taken as seriously as many other less critical processes.

Elements of Effective Hiring

The elements of an effective hiring process that are often missing include the following:

1. Assuring the Hire is Necessary: Although it is pretty common in most companies to justify the necessity of a new hire, it tends to stop there.  Fiscal responsibility should drive companies to always question whether hiring a new employee is necessary, but the emphasis on reducing headcount should coincide with tension to improve processes to the point where replacements are not always needed.  The focus should be improvements first, and hiring second.
2. Finding the Right Person: Wanting to hire a new employee quickly should never drive people to shortcut the need to find the right person.  It takes time to screen candidates effectively which, unfortunately, often leads companies to become impatient and hire the wrong person.  Concern about the extra workload caused by a vacancy should be dealt with accordingly (e.g., contract labor or temporarily shifting responsibilities), and any concern about losing a position by not filling it quickly is irresponsible and potentially destructive.
3. Training and Developing People: Training and developing people once they are hired helps assure they succeed in their jobs, grow and learn, feel respected, and reduces the chance they will leave for a job at another company. Although many companies talk about the importance of training and development, very few actually do it well.  Like any critical process, developing employees should have clear objectives, a defined method, effective measures, and the proper focus to assure it happens.
4. Measuring Effectiveness of the Process: Because the hiring process is so critical to the success of the organization, it is important to measure its performance and use the results to drive improvement. Some of the events that should trigger problem-solving include firings, resignations, and the need to hire leaders from the outside. The measure should be visible to everyone involved in the process so its objectives are clear and performance is visible.

When the culture is driven by a continual improvement mindset, hiring for any reason except replacing a retiree or to staff up for growth signifies a breakdown in the process.  If it were impossible – or extremely difficult to fire people – this concept would be much easier to accept.  As long as it remains easy to fire people, though, there will be little tension to improve the hiring process, and successfully driving a continual improvement culture within the company will remain elusive.