I say this because in my decades of experience with lean I have always found that with every lean conversion, the thing you are trying to transform is the people. Unfortunately, I think that most companies that start down the lean path don’t see it this way. Their leaders tend to understand lean as a cost reduction program, which will help them eliminate people.
But let’s back up and think about this for a moment. Any company, no matter what the industry, is made up of just three elements:
- A group of people
- A bunch of processes
- A common goal of delivering value to a set of customers
It really is no more complicated than that. Almost everyone can agree with this except when it comes to talking about their own company. Then you will hear all the excuses as to why they are so much more complicated than other companies. Blah, blah, blah.
Using this definition, how does lean fit in? This is also simple. All we are trying to do with lean is teach people how to see and remove the waste from the processes so that you can deliver more value to your customers than your competitors can. And of course, the best way to increase enterprise value is by delivering more value to your customers over long periods of time.
Add to this the fact that your current processes were developed by your people. In fact, you probably patted them on the back for developing these processes and improving them as you went along. But when you look at the processes with “lean eyes” what you see is a tremendous amount of waste. The only way you and your people can remove it is by changing the people. I don’t mean throwing them out and getting new ones but rather transforming the way they think and act so that they can begin to see the waste and remove it. This may sound simple but it is not because people will resist the changes. If a group of machines has always taken 3 hours to change over the idea that this can and should be done in less than 10 minutes will seem absurd. No way Jose! So, what to do?
You have to transform the people by showing them a better way. You already know that the only asset that you have that can appreciate over time is your people. Instead of driving cost reduction programs aimed at eliminating people you should think in terms of trying to grow their capabilities so you can double in size with the current number of people. This is the scenario where everyone wins.
So, focus on the people. Start by telling everyone why you want to make the move to lean and what is in it for them. I think every company has the following obligations to its people:
- Secure their jobs in a clean, safe environment,
- Give them a chance to learn and grow their skills and value,
- Create an opportunity for individual wealth creation.
I came to this realization during my first job as general manager at the General Electric Company. It was 1982, and the economy was in recession. As a result, we had lots of pressure from corporate to cut back and lay people off. Even though these were only temporary layoffs I was keenly aware of the impact they had not only on our associates but on the families that depended on them. Sometimes this cannot be avoided—failing to do so might put everyone’s job at risk. Even so, I felt tremendous responsibility for all of my employees and my obligation to both protect their jobs and give them a chance to grow.
The best job security, of course, comes from being part of a profitable, growing company. And lean remains in my mind the best way to make that happen. Rapid improvements allow you to free up people to learn new skills. As for wealth creation, my old company, The Wiremold Company, had profit sharing for the short-term gains and matching 401k contributions with company stock for the long term. When the company was sold the employees were the largest single shareholder and got the biggest share of the gains through the 401k plan. We increased enterprise value by just under 2,500% in about 10 years so this made a lot of people very happy.
To transform your people, you need to create a learning environment where everyone is constantly learning and excited to come to work. The move to lean does this because it is a learn-by-doing activity that allows everyone to get engaged. Some initial basic training in lean principles is good, but people should be careful not to overdo the classroom training. The real learning occurs on kaizen teams that are fully engaged in a focused area with stretch targets for a full week. (this is the most normal kaizen length but it could be shorter or longer). The teams should consist of both hourly and salaried people equally, working on implementing change not just planning for change. Each team should have a leader and a co-leader. They need to know up front that no one will lose their jobs as a result of the kaizen activity. Everyone needs to be on multiple kaizen teams so the learning can spread as rapidly as possible. Just understanding management’s commitment to its people provides a safe environment for change, big, rapid change to occur.
You learn a lot about your people through kaizen activity. Many people will distinguish themselves through what they do in a kaizen leadership role. In addition, as you free up people (say you go from eight people to five to do the same job), remove the three best people and give them a promotional opportunity or a chance to increase their value by learning new skills. Celebrate the gains in both the process and the people. Get everyone involved in giving ideas on how to eliminate the waste. The best ideas will always come from the people doing the work. With lean, there is no such thing as salaried associates and hourly associates: only company associates and teammates.
I remember early on at The Wiremold Company, when I was out on the shop floor about 8:30 at night during the second day of a kaizen. Lance and Joe, a couple of guys from our maintenance department, came up to me. They were on a team creating a new one-piece flow cell and they had a problem. The rolling mill (about 100 feet long) that we wanted to incorporate in the cell wouldn’t fit unless they could cut a hole in a wall. I just said, “Well okay, go ahead and make the hole.” They were kind of shocked at this response. They said, “Really, we can do that?” They were so happy and had the hole cut and the machine in place by the next day.
At the end of the week my CFO said to me, “Art, what did you do to Lance?” I said, “Nothing, I just told him he could cut a hole in the wall, why do you ask?” Apparently, Lance had always been a bit of a complainer and hard to motivate. Now he was a changed man. He went on to run our employee association and plan all the Christmas parties and more—in addition to being a great employee contributing ideas for how we could get better.
A similar story occurred with one our harder to manage toolmakers. Jeff was dead set against having Japanese consultants in our plant and let me know about it at every opportunity. Once we started putting him on kaizen teams, however, a whole new Jeff emerged. He was a true mechanical genius and could not only see much better ways to do things but could run back down to the tool room and in very short order make changes to equipment or tooling that saved us enormous amounts of time. We promoted Jeff eventually to be a tool designer. These kinds of examples occurred over and over again as the kaizen process allowed peoples true talents to emerge.
So, if you are thinking about making the lean turnaround, understand that it is all about people. Creating the learning environment, and growing your people will make you successful. Faster growth, higher profits, better quality, lower costs etc. all will result from this focus on people. Doubling your sales with the same number of people is always a winning formula. So spend your time growing your people not trying to figure out how to get rid of them.
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