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Ask Art: What Role does Human Resources Play in a Lean Turnaround?

by Art Byrne
October 21, 2020

Ask Art: What Role does Human Resources Play in a Lean Turnaround?

by Art Byrne
October 21, 2020 | Comments (0)

I don’t think there is any correct answer to this question, as the response depends on a company’s unique culture, as well as its understanding what it means to be “lean.” Most companies start out with the wrong idea about lean. They see lean as either a cost reduction program which they assign to the VP of Operations; or as a bunch of tools that need to be taught to all employees (in which case they assign this “training exercise” to Human Resources).

I have seen this latter approach many times when asked for input by someone in the HR department of a large company. I invariably refuse to participate (politely of course), telling them that their approach to lean tells me they don’t understand what it is. The cost reduction gang also have it wrong, but they at least are not assigning the task to HR—except when they need their help in firing the people they free up (which is a good way to end any lean program by the way.)

You may not have lean experts hidden away in the HR department, but, because lean is all about people, your HR folks can play a crucial role.The truth is that lean is a “learn-by-doing” exercise that can’t be taught in the classroom. This doesn’t eliminate the need for some form of training, but this work will be effective only if it is led by a lean expert and combined with a “doing” exercise such as a week-long kaizen. In this type of approach, the CEO and senior management team need to lead the charge by constantly communicating the vision and approach and, more importantly, personally participating in 5 to 6 week-long kaizen events each year. In fact, I recommend that any CEO starting down the lean path should participate in a week-long kaizen event every month for the first full year. It is hard to lead a lean turnaround if you can’t commit to becoming a lean expert yourself.

You can’t expect to find a bunch of lean experts hidden away in the HR department, so it should be clear that they won’t be leading the charge. Even so, because lean is all about people they play a very critical role in other ways. I’ll use my old company, The Wiremold Company as an example.

One huge lesson from this experience is that converting to lean and running a lean enterprise is a team effort. Everyone has to be on board and working together to be successful. As a result, the employee profile you start out with, plus the type of employee you hire, are critical to your success. At Wiremold, our HR department was able to develop a simple 30 or so question test that gave us a very good profile of the personality traits of our current employees. This screened for (among other things) whether someone could be a team player or not. This helped us to avoid putting people in jobs that they were not suited for. It also identified people we needed to work with or remove. We didn’t have to do much removing as most of those people self-selected and left. We also used this test to screen any new hires to ensure we didn’t bring in new problems.

In order to grow the company, we needed to build up our engineering resources to develop new products. We didn’t want to hire anyone from a company with a batch mentality, as they would just bring all the traditional ideas that we were trying to get rid of. So, HR set up a program with a number of New England engineering schools (Wiremold was located in Hartford, CT) so that we could select from their best students and hire all new engineers right out of school to train in the lean approach from the start. We made it a requirement that all of these new engineers spend their first two years on the shop floor before they could progress into product design. We wanted to give them a solid background in lean first and make sure they didn't design any products we couldn't make. This worked very well and really accelerated our sales growth and product leadership.

Initially we had more than 65 job classifications, and with lean we only needed 5 or 6. HR worked with the union to eventually get this done. We also introduced a suggestion program for all associates that, once again, HR was instrumental in setting up and administering. HR also created an annual employee survey to give us feedback on how our associates felt about the rapid changes we were making. Myself and the head of HR then sat down with each group of employees to go over their concerns and give responses. We buried about five questions in the survey that gave us an excellent idea of how employees viewed their direct supervisor. This was hard to get at in other ways but allowed us to make a lot of important corrections and changes.

One of HR’s biggest contributions was to get my direct management team to begin to function as one team. At first they tended to point fingers at each other when something went wrong and run into my office to get me to fix the problem. Eventually they understood that I refused to referee these squabbles and they need to do something about it on their own. HR organized some offsite meetings and brought in a mediator. (I think it was actually a marriage counselor.) In truth it was a total team effort in the end and made a huge difference in our lean turnaround once the senior leadership team was on board and working as one.

One of HR’s biggest contributions was to get my direct management team to begin to function as one team.Another issue I assigned to HR was to come up with a simple statement of what behaviors we expected from everyone when they came to work. When I got there we had an “employee manual” that spelled out the rules, so to speak, but over the years it had grown into a very thick volume that only a lawyer could love or even understand. Once again HR worked with our senior leadership team and this is what they came up with:

WIREMOLD CODE OF CONDUCT

  • Respect Others
  • Tell The Truth
  • Be Fair
  • Try New Ideas
  • Ask Why
  • Keep Your Promises
  • Do Your Share

We had these printed on wallet size plastic cards and gave them to every associate. We also posted them on the walls and bulletin boards. They were not only simple but incorporated our lean principles so it all tied together. To fit in with this HR also helped eliminate some historical practices, like having salaried employees wear ties (or similar for our female managers). Our work force was sure that ties “cut off circulation to the brain.” Surprisingly. This was a traumatic change for many people. Even so, for lean to work we needed an environment where everyone was respected for their contributions to removing the waste not their rank or status.

HR also worked with the Kaizen Promotion Office to devise a three-day introductory training program for all new hires. This gave new associates a good understanding of what we were all about and what to expect. We did not, however, see this as our main training approach. That would come when you participated on full-week kaizen teams and got your hands dirty in a real environment. Learn by doing. As we evolved the Kaizen Promotion Office would conduct a three-hour refresher course on the Friday afternoon before a kaizen would start to bring everyone up to speed on the approach, terminology, methods and paperwork they would be using on the kaizen starting on Monday. This is a much better approach than having someone go to a week-long training program and then just go back to their regular job and not use any of it for maybe six months, by which time they would have forgotten most of it.

In summary, although you shouldn’t expect HR to lead the kaizen effort or set up extensive training programs there is still plenty for them to do that will be critical to the success of your lean turnaround. After all, lean is all about people.

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