Preparing for the Natural Tendency to Backslide

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“Patience is waiting. Not passively waiting. That is laziness. But to keep going when the going is hard and slow - that is patience.” Alexandre Dumas Père

As I’ve written many times before, I don’t believe there is ever a point where a company can say that its lean mindset is truly sustainable.  There is just too much of a natural pull back to the traditional way of doing things to ever feel that an organization has “made it.” And in many instances, this "natural pull" is strong enough to bring the improvement momentum to a grinding halt.

The Effect of a Crisis

So how do you know when the organization is abandoning lean principles and slipping back into its own ways?  There are actually many signs of lean decay, but one of the most common shows up when the organization faces a crisis.  When the company faces a crisis – falling prices, increased raw material costs, a loss of market share, or a host of other problems – do leaders appear to remain calm, keep the focus on the ideal condition, and continue to drive kaizen activity to address the gaps, or do they abandon lean and develop countermeasures that consist of cost-cutting and other short-term measures that pull the organization away from the activities that strengthen the operation?

When facing a crisis, it is perfectly normal to abandon new thinking and return to old habits, especially when there is a lack of experience in the new way or doubts about whether or not it will quickly address the organization’s problems.  Leaders tend to face immense pressure to assure the organization performs and unless there is a deep understanding of lean and the organization, it is not practical to expect that they will stick to something they do not know will get the organization back on track.

To prevent abandonment of the move toward lean, it is critical that leaders become involved in the deployment and learn as the organization begins its transformation.  It is too easy for those who sit on the sidelines and watch the organization change to pull the plug when a crisis hits.  They don’t understand why the improvements occur and that learning continues to occur even when an attempted improvement does not succeed.  They also do not understand that the most significant improvements require a transformation in thinking and leadership throughout the organization.

Unfortunately, successfully moving the organization toward a lean mindset often requires good timing as much as a clear plan and an experienced deployment team.  Transformation can take many years and Western business has never been known for its patience.  Throughout my career, I have worked with leaders who want to drive Toyota-like improvements without appreciating the decades that Toyota worked on developing their system.  Because of this, it is important to assure that learning takes place as the deployment proceeds.  This can only occur when leaders are involved from the beginning and PDCA-thinking is applied throughout the organization.

"The first step is transformation of the individual.  This transformation is discontinuous." - W. Edwards Deming

There is nothing more critical to success in a lean transformation than learning.  Keep in mind, however, that people can only learn when and what they’re able to at any given time.  By continuing to emphasize the need to understand cause and effect – or the reasons why results are what they are – you will greatly increase the chances that the organization will develop a learning environment.

Do We Know How to Learn?

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“The theory of knowledge that management in any form is prediction.”  W. Edwards Deming

When I first read the above quote many years ago, I didn't fully comprehend what Deming was trying to say.  After a lot of thought, reflection, and experience with a variety of organizations and management systems, I came to realize the significance of this statement as the basis of organizational - and personal - learning.

Whether through arrogance, lack of understanding, or just having too much to do, many organizations have failed to adopt of the Plan-Do-Study-Act (PDSA) cycle within their operations.  Others have implemented the cycle within their problem-solving process but failed to recognized it as a mental model for leadership and decision-making.

The Learning Organization

The power of PDSA thinking lies in the realization that every decision is, in effect, a prediction that a specific outcome will occur.   If one consciously adopts this mindset and practices it to the point where it becomes natural, significant learning can occur.

Taking action and expecting a specific outcome is not profound or revolutionary. But too often, the connection between action and outcome can be so basic that it becomes unconscious. And when the connection is not consciously recognized, little or no follow-up takes place to assure that the outcome is as expected and more importantly, why or why not a particular outcome occurred.  It is this lack of follow-up that prevents learning from taking place.

Too often, I have seen organizations continue to operate in the same manner, even when it does not appear to work.  They try harder or their leaders emphasize performance more strongly but any improvement in results that does occur is short-lived.  Organizations like this don't seem to understand that their performance is not the due to chance, but the result of a set of predictions that are failing to come true.  Improvement requires careful observation and study to determine why their hypotheses are false.

When decisions and actions are seen as hypotheses that specific results will occur, there is more of a tendency to watch for the connection.  “The why” becomes just as important as “the what” when reviewing results.  When results do not meet expectations, team-level reflection takes place to understand the reasons and the hypotheses are adjusted accordingly.  It is this process that enables organizational learning to occur.

When looked at in this way, it becomes clearer that becoming a learning organization does not mean spending more time in the classroom.  It means teaching people to consciously recognize that decisions are predictions, and honing the ability to study and understand whether (and why) results match the predictions.

Developing a PDSA mindset throughout an organization takes a lot of effort, practice, and patience.  People have to be coached and questioned regularly to understand that actions – even seemingly small ones – are predictions of specific outcomes.  The more developed this level of reflection becomes, the more the process will become a habit, and the more organizational learning will occur.

The New Blood Dilemma

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If there is one statement that always makes me cringe, it's, "we need to bring new blood into the organization." Often the result of frustration, business leaders tend to look to the outside in the hopes that someone who isn't already "poisoned" by the company's systems and culture can bring in the energy and new ideas to address problems and help transform the company.

Addressing Cultural Apathy

There are many examples of companies becoming stagnant and not addressing problems effectively - or getting to the point where the problems are no longer seen as problems. When this happens, though, it's critical to understand the reasons behind the lack of success rather than jump to the conclusion that reaching outside for new leaders is the answer.  New leaders are a countermeasure that can fail if the root causes of the poor performance or apathy are not effectively addressed.

As with any aspect of performance, improving the culture begins with clarifying the ideal condition - i.e., what you want the culture to look like, how people are expected to perform, the energy level, etc.  Once the ideal culture is defined, it's time to look for root causes or barriers preventing you from getting there. This may involve bringing in new leaders from the outside or it may not. Either way, a decision can be made logically rather than as reaction to frustration.

The Problems With New Blood

Although new ideas and increased energy can result from new leaders, there are many potential drawbacks that need to be considered before making the decision to hire from the outside.

New leaders can very easily have a negative effect on the cultural elements that you do want to maintain. I've seen situations over and over again where new leaders bring with them a new management style or differing values that actually damage the organization.   This could result from increasing fear, shifting priorities, ignoring direction, or a host of other elements that are not actually related to the cultural problems you are trying to address.

Another issue with new leaders is they often do not know the company's systems, products, or customers, and the pressure to quickly  bring about change can lead to poor decisions and destructive results.  Unless the organization has a clearly defined way, new leaders have the freedom to operate in any way they see fit - which can lead to confusion and frustration of team members.

It has been speculated that one of the contributors to Toyota's recent problems was the hiring of leaders from the outside who did not truly understand the Toyota Way. The tremendous growth experienced by the company had led them to abandon their policy of promoting only from the inside and bring in leaders who had not grown up in the system.  And if it can happen to a company with a way as well developed as the TPS, it can happen to anyone.

Another major problem with hiring leaders from the outside is the demotivation of existing team members. Those on the team who want to grow and develop can begin to see feel undervalued, frustrated, and stuck.  As a result, they may leave the company or stay with a much lower level of energy.

Finally, hiring for the outside is expensive in terms of recruiting costs, time, and training of the person hired.

How To Do It - When You Have To Do It

Anyone reading this post may think that I never support the idea of bringing in people from the outside. Although I don't particularly like it, I do recognize that there are times when it is necessary.

Before doing so, however, it is critical to clarify the ideal state so you can effectively understand the reasons behind the gap between the ideal and the current state.  If it's a leadership issue and changes are necessary, look inside the organization before going outside to find replacements.   If nobody inside the organization is qualified for the position(s), look outside - but recognize that not having people ready identifies a serious problem within the leadership development process and requires countermeasures to prevent from having to do it again.

Also, the clearer the company’s values and way are understood and developed, the better chance you'll have of hiring the right person and improving his or her chances for success.

Transformation? Not Without Purpose

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Create constancy of purpose toward improvement of product and service, with the aim to become competitive, stay in business and to provide jobs. W. Edwards Deming

One of the most common roadblocks companies face when attempting a lean deployment is a lack of clarity around the organization’s fundamental purpose.  Without a clear and consistent understanding of why the business exists and what it is expected to accomplish, any attempt to transform the culture will lead to frustration, disappointment, and eventual abandonment of the effort.

Identifying Waste?

Waste exists in virtually every process, and can be identified and reduced without a significant amount of effort.  When the organization does not have a clear purpose, however, improvements tend to be superficial and transformation does not occur.

When leaders consistently drive focus around the company’s core business, it becomes easier to identify the systems and policies that interfere with serving customers.  It is unfortunately fairly common to see systems related to performance evaluation, IT, recruiting and hiring, and other areas that are overly complex or do little to help the organization meet the needs of its customers.  Without constancy of purpose, however, there is no lens with which to evaluate whether a system truly adds value or not.

Begin With Purpose

The Cambridge Dictionary of American English defines an organization as, “a group whose members work together for a shared purpose in a continuing way.”  Without a shared purpose, there is no organization.  There is only a group of people who come to work each day, spend time on what they feel is important, and go home.

The purpose does not need to be sophisticated, creative or witty.  It just needs to be clear and unchanging.  Although not necessarily an easy thing to do, clarifying and living in accordance with the purpose helps people understand the value the organization provides and, when this happens, transformation truly begins to occur.

What's Your Countermeasure?

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Creating a lean culture requires a good deal of clarity and consistency from leaders.  Since lean is not normal for most people, there will be a continual pull within the organization to return to old ways.  Because of this, it is important to take advantage of every opportunity to transform the way people think and operate.

One valuable coaching opportunity occurs in the recurring meetings that take place within the organization.  The closer the meeting is to the daily operation, the more problems that will be highlighted because it is much easier to see the issues that affect us today than three or six months from now.  Whenever a problem is identified in a meeting like this, it is critical for leaders to ask, “what’s your countermeasure?”

Never Accept a Quick Fix

Remember that a countermeasure is not a quick fix that only addresses the symptoms of a problem.  To be effective, countermeasures must be developed and proven through the PDCA process where an issue’s root cause is determined, ideas are developed and tested, and actions are implemented to, not only address the current situation, but help prevent the problem from occurring again in the future.

In order for the kaizen process to work on a daily basis, people have to learn to move through the PDCA cycle quickly and frequently.  Because of this, expecting problems to be permanently fixed is unrealistic.  What is realistic, though, is to expect processes to improve and people to get better and more proactive at addressing problems.

It’s All About Expectations

The more leaders ask for countermeasures in team meetings, the more people will understand the importance of addressing problems when they happen instead of hoping they go away by themselves.  A clear message will be sent that it is never acceptable to let problems continue without addressing them through the kaizen process.

At first, the question of countermeasures will be met with strange looks and panic.  Over time, however, people will come to meetings prepared to talk about how problems have been addressed and what is being done to keep the problem from affecting the operation in the future.

Performance Improvement or Performer Improvement?

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To truly reap the benefits of continual improvement, what should be the focus of a kaizen process?  Should efforts be focused on improving business performance or improving people through learning and development?

Obviously every company wants to continually improve performance, but wanting to do it and knowing how to do it over the long-term are two different things.  It comes down to a question of cause and effect – or what needs to happen to cause improvements to occur on a continual basis?

When a person or team comes up with an idea to improve a process, there are two possible outcomes: the idea will work or it won’t.   You can never guarantee that an idea will result in improvement.  What you can do, though, is design the process so that people learn about the areas in which they work by testing ideas, and learn about the kaizen process by participating in improvement activities.

When an improvement process is only about business performance, team members will not necessarily develop kaizen skills.  And in this situation, the organization misses out on the opportunity to grow kaizen activity because the number of people who are able to facilitate improvement projects remains static.

In most cases, the direct financial benefit from an individual kaizen will be relatively small.  True measurable benefits from a kaizen process will result only when improvements occur frequently.  This can only happen when a large number of people understand the process and are actively involved in improvement activities.

To grow the process and change the culture, leaders must emphasize the importance of developing problem-solving skills with each kaizen project.  Whenever the results of an improvement effort are presented, it is critical to inquire about the learning that occurred.  Too much focus on the business result can drastically stunt the growth of the process and keep the organization from reaching the type of success that few have ever experienced.

Letting Up Is Not An Option

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After winning at Wimbledon, Roger Federer is once again the number one tennis player in the world.  Now that he has made it to the top, can he expect to take it easy and hope to remain there?  Will his practice sessions and workouts be easier now that he has only to sustain the level of performance that got him to number one?  And since he has obviously mastered the sport, he is no longer in need of a coach, right?

When talking about competing in a highly competitive environment like tennis, the obvious answer to these questions is, "no."  Yet in a highly competitive business environment, it is fairly common to let up when performance improves as if the gains will hold and things will continue to advance without the type of focus it took to get there.  In some organizations, the effort actually loses support because of the feeling that further improvement is not worth the investment.

Once You think You've Won, You Lost

People in organizations where lean thinking has taken hold understand that continual improvement requires continual effort. This means never letting up on the drive to develop people and assure continued learning.  As with an athlete mastering a sport, there is no such thing as maintaining a certain level of performance.  There is either improvement or deterioration - and as you get better, improvement becomes more difficult to maintain.

It's interesting that people use the term "continuous improvement" while deep down believing that there is a point where things are good enough and not worth the effort to continue.  I referred to this in an earlier post as the we-can-always-improve-but syndrome.   If we're striving for perfection, improvement is always needed.  Changes in people, technology, customer tastes, and many other aspects of the environment invalidate any notion of sustaining the gains.  The only way to sustain a given level of performance is to continue to improve.

Performance Improves . . . And It’s Fun

Those who buy into the continual improvement philosophy find working in a lean thinking environment very satisfying.  They understand the link between their efforts and the company’s performance and are energized by the ability to participate in improving processes.  For those in leadership positions, however, it can be exhausting to continually fight against the barriers that interfere with improvement.  And since these barriers naturally occur within organizations, the effort to remove them will never end.

Just as Roger Federer needs to continue to improve to remain number one, an organization must continually push harder, learn faster, and get stronger in order to remain relevant.  Failing to do this can pretty much guarantee membership in the growing group of companies that, at one time appeared invincible, but have since disappeared because of arrogance or apathy toward improvement.