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Ask Art: How Do I Get the Senior Management Team On Board with Lean?

by Art Byrne
December 10, 2018

Ask Art: How Do I Get the Senior Management Team On Board with Lean?

by Art Byrne
December 10, 2018 | Comments (11)

This is a very good question and one that every leader thinking about making the lean turnaround should be aware of before starting down the lean path. After all, if you can’t get your senior management team working with you and committed to lean, then converting to lean, which is already hard when everything is aligned, will be almost impossible to do. Lean requires teamwork. You can’t have your senior leadership, and with them their separate organizations, all going in different directions without creating chaos both internally and with your customer base who will wind up totally confused.

But shouldn’t this be easy to do? After all, you’re the boss and should be able to just tell your direct reports about the new lean initiative and they will fall in line. Right? No, wrong. It would be nice if it could happen that way but trust me, it won’t. There are many reasons for this but perhaps the biggest is that lean is almost the exact opposite of everything that you and your senior management team have learned so far in your careers. Here are some of the key ways your thinking will be challenged:

               Big batch vs. one-piece-flow

               Push scheduling vs. pull system

               Excess inventory vs. sell-one-make-one

               Complex vs. simple/visual

               Functional departments vs. process/value stream teams

               Forecast/budget driven vs. demand driven

               Quality inspected in vs. quality built in

And so you should expect strong resistance. Folks will argue: “This will never work here.” “We aren’t like those other companies.” “We tried something like this several years ago and it was a disaster.” And these won’t just be casual statements. They will come from your best and most experienced people—smart and talented people who succeeded over the years by applying and believing in all the traditional management approaches that you will need to get rid of to become lean. You can expect a fight.

You can also expect that each member of your senior team will have a different view of what lean is, and therefore whether or not it applies to them and their function. For example, most people see lean as a cost reduction tool that applies primarily to operations. Or, stated another way, “some manufacturing thing.” And so you can expect your VP of Sales, your VP of Finance, VP of Human Resources and probably the VP of IT to figure that lean doesn’t apply to them and that they can just ignore it and keep doing what they have been doing. You of course should anticipate and prevent them from considering lean in such a limited way. Lean in fact is strategic. It is the best way to run any business as its focus on removing waste allows you to deliver more value to your customers than your competitors can. This will allow you to gain market share and grow.

Consider two examples to illustrate the point: the VP of Sales and the VP of Finance. Let’s start with sales. With lean, a key objective is to level load your production by introducing one-piece-flow. But right away you find that 50% of sales, under the current batch system, ship in the last week of the month. This can’t continue going on for very long. When you investigate you find that this is primarily driven by your sales terms. So you will need to change the sales terms in order to level out the demand. You will likely get pushback, not only on the traditional sales terms but also on the traditional sales practice of seeking large orders and providing volume discounts. This not only creates lumpy demand for operations but does so at a discounted price that isn’t necessary.

Lean in fact is strategic. It is the best way to run any business as its focus on removing waste allows you to deliver more value to your customers than your competitors can. This will allow you to gain market share and grow.The same is true in the finance area. You can expect your VP of Finance to defend her standard cost accounting approach with all kinds of excuses as to why this cannot be changed and of the dire consequences that will arise if you get rid of the standard cost approach. This is in spite of the fact that standard cost accounting incentivizes most of the things you are trying to eliminate with lean. Building inventory is a good example here. Inventory under the lean approach is considered the number one waste (the “root of all evil” in my opinion) as it hides and facilitates the waste you are trying to eliminate. With standard cost accounting, however, building inventory in the short term is a good thing as it defers some overhead costs to a later period and makes the P&L statement look good in the current period.

I could cite other examples but the issue here is learning how to overcome this resistance and build a lean management team. I’m not going to pretend this is easy. But there are many things that can help make the conversion. First off you need to persuade your senior team that converting to lean is essential and will lead to dramatic results. I would share specific examples of the types of success that other companies have had as a result of converting to lean. Continue to make clear that lean is strategic and not just a bunch of tools that can be used to cut costs. Make the point that removing waste from your current operations will provide strategic options that you currently don’t have: a two-day lead time vs. your current six-week lead time, for example. Also, be sure to explain that lean requires teamwork to be successful. You can’t have one part of the organization working at cross purposes to another.

Next, take your senior team to visit some companies that are well down the lean path so that your people can see how different a lean operation looks from what you do now. At both Danaher and Wiremold, I found that a week in Japan visiting about eight companies was very eye opening for everyone. During these visits your team will also get a chance to ask questions about how the other companies went about it and what things to avoid. When you get back, get your team together and create a value stream structure that is very different from your current functional approach. To do so, you’ll need to pick value stream leaders, and doing this as a team in an interactive way will be a great team building exercise; and will help create the organizational structure you will need going forward. Don’t worry about what function or background the team leaders come from. Pick from your highest potential employees, ones that you think can rise 2-4 levels and could run a small/medium size business because that’s what you will be asking them to do.

This still won’t get you there. You’ll still have skeptics. One of the best ways to overcome this is to make sure your senior team members are on a lot of kaizens each year. I think that the minimum should be six week-long kaizen teams each year. Don’t make them the team leaders; just members of the teams. They will learn more faster doing this than anything else you can do. Don’t confine them to kaizen teams in their own area but give them a wide view of many functions. Having the sales VP on manufacturing kaizen teams, for example, will give him/her a much better understanding of what has to happen to get the order out.

Lastly, once you have a value stream structure you have to deploy down the company's operational excellence goals to the value stream leaders. This gets everyone going in the same direction and focusing on removing the waste (as opposed to the traditional approach of make-the-month). It works best if you review their progress on a frequent basis. I like weekly. It is very important that the entire management team participate in these reviews and act like a team. You are there to help the team leaders not beat them up. With all the key decision makers in the room you can act quickly and make rapid progress. At the same time, you will be solidifying your senior management team as a bunch of lean zealots working together to move the company forward. Becoming a lean enterprise requires having a lean management team. Keep at it till you get it right.

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11 Comments | Post a Comment
Bob Emiliani December 10, 2018

Art, with respect, this is the hackneyed advice that has been proven over decades to have very little impact. The good news is that this consistently unfavorable outcome clearly informs us that the problem is more complicated than is commonly understood, and that we must look elsewhere for answers -- work that I have undertaken over the last several years. In particular, there are deep-rooted economic, social, political, historical, business, and philosophical factors that generate strong executive resistance to Lean management. I have articulated these, in detail, in my recent writings, and the findings point the way to many other ideas and methods to experiment with in order to gain acceptance for Lean management among executives. We all share the same goal of advancing Lean, but to do that we must now move on and vigorously apply "trystorming" to very important this problem.

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art byrne December 10, 2018
3 People AGREE with this reply

Bob, I applaud the research you are doing into the various factors that cause a strong executive resistance to lean. I'm sure you are correct in your assumptions otherwise a lot more companies would have already converted to lean. I think the point you are missing in my "hackneyed advice" is that this post starts with the premis that the leader/CEO is already commited to lean but needs to get the rest of the team on board. You are also completly discounting the fact that the advice comes from my own experience in doing this successfully with a number of different management teams in a number of different industries. So when you say it will cause "a consistently unfavorable outcome" I have to disagree. My experience is just the opposite. You have a long list of all the factors that line up against lean. I don't disagree with any of them but I'd rather focus on things that I know work and, assuming the leader/CEO is onboard and driving the change, I know this approach works. I'm sure we'll never convert everyone to lean due to the factors you mention but at least we can do what we can to help those that are willing to go down the lean path.

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Bob Emiliani December 10, 2018

It was not clear to me that the question came from a CEO. It is a common question that comes from all levels in an organization. Regardless, the CEO will have to confront the problems I outlined with the other senior managers. I did not discount your experience at all; that's why I said, "respectfully..." and also noted that the impact was non-zero. Still, the empirical evidence indicates the overall impact of your approach is small. Therefore, it is my view we have to aim higher and try new things based upon new information and the advancement of knowledge. 

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Harry Kenworthy December 10, 2018
1 Person AGREES with this comment

Hi Art - working mainly in the lean government sector (although this has worked in all sectors) we have developed a very successful proven path model as follows:

1. After winning an RFQ/RFP, or doing a pilot phase  - Initial client engagement and basic education about lean via readings and conference calls 3-4 weeks before "launch week". The top executive needs to clearly understand his/her role and the expectations that must be set. We are always looking for top managers who "get it" and are understanding what they need to do "to live it". If this prelim phase is a "go" to us, then...

2. Set up what we call a launch week. This is supported 2-3 weeks in advance by the top executive issuing the invite memo coupled with the expectation that all attendees to the two day boot camp workshop (including the top exec) brings a problem, process issue, etc, that they will work on during the boot camp. Also, internal "coaches" are selected who are the internal folks who will develop greater lean proficiency.

The launch week consists of:

- Day 1 meetings with top exec, designated executive lean champion for the organization, several other key executives and the internal designated coaches to set expectations

- Day 2-3 the boot camp workshop - hands on - attendees are the top exec, his/her top management team and selected coaches (max size = 24 attendees). Obviously, for large organizations (we did the city of Phoenix), a separate boot camp was given for their 24 coaches, due to organization size. The top exec states to all that lean is owned by each of the top managers in the boot camp. The output of the boot camp is as follows:

- a preliminary project charter which each top manager needs to refine over the next 3 weeks

- a series of action items that each of them is to personally do over the following 3 weeks: apply 5S to an area, use an A3 on one problem, develop one visual control, do an elevator speech for their team, spaghetti map a key process, and do a data concentration diagram. The top executive insists they must learn by doing.

Day 4 - set up the lean steering committee (LSC) (members determined in the prework leading up to the launch week) - training, developing their standard work, LSC charter, naming the initiative (many avoid using the work lean), develop the organization's elevator speech, develop a project ranking grid to "choose wisely" - high leverage initial projects (Kaizens)

Day 5 - Work with the internal coaches on more indepth training (A3s, etc.), establish which top managers they will support as a coach, start work on the all employee lean one hour interactive intro.

3. Week 2 - 3-4 weeks after launch week

Days 1-3 - split up coaching teams with consultant(s) (based on organization size) and meet with each top manager for 90-120 minutes to review all of their action items from launch week, project charter, and all areas they feel would benefit from applying lean thinking. This also starts to populate a project tracking grid.

Day 4 - might be still some interviews left. LSC meeting in the PM to cover progress to date, and rank top project charters for initial kaizen events. Also review the one hour all employee intro the coaches have developed.

Day 5 - work with coaches on further training and also consolidate the project tracking grid. establish the monthly coach-top manager meetings. Establish schedule for all employee lean intro meetings to be done by each top manager (not the coaches).

All throughout, the lean effort is constantly communicated by the top executive that the top managers "own lean" and the coaches are resources to support them.

This establishes a great start. If the top executive won't attend the entire two day boot camp or pushes off her/his responsibilites and doesn't follow through with the required expectations and discipline, then we talk to them about ceasing the engagement. Hopefully, the upfront work has already set the stage so disengaging doesn't happen.

I'm interested in any comments.

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Art byrne December 10, 2018

 

Harry, thanks for your great additions to the post. I was particularly happy to see you would be willing to fire the client if the CEO does not follow through on his/her responsibilities. Learn by doing is always the right approach. It is a little hard to grasp all of the details you present [how do you train the internal coaches for example] but if you find this approach is successful then by all means stick with it and keep refining it. I don’t think we will ever find a single “correct” way to do this and different cultures will respond in different ways. I hope others can add to the post with other good approaches that have worked for them. At the end of the day the objective should be to convert as many companies as possible to lean enterprises. How we get there is not as important. Keep up the good work. 

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Carl Watt December 11, 2018

Great comments, Art.  You do, others teach.  For us lean staff people though, the only method I know is to look for specific problems and show a lean point solution - that can get a foot in the door.

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Art byrne December 11, 2018

Carl, I’m glad you enjoyed the post. I agree with you a 100% that showing some good lean results in your own company is a great way to get the attention of senior management and hopefully a commitment from them to go further. It is hard to say, “this will never work here” when they are looking at a few actual examples of it working in their own company.

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Jedhi December 11, 2018
3 People AGREE with this comment

I appreciate the article. Transforming an entire organization is a monumental task. I have found that I can impact my own sphere. 

I have found less resistance by not using any "lean" venacular. I run a plant with 280 employees, none of which know they know lean.

I don't have suppliers on any lean schedule (even internal) so our entire value stream is not "lean". However, within our four walls, our teams understand their purpose, have visualized their work, and understand measured ways to improve it. They use lean tools that they have never heard called "lean tools", it's just how we taught them to make their life easier (process timing, standard work sheets, walk paths, job instruction, connect processes and improve flow). Our management system supports and are involved in their improvement activities, use kamishibai (they've never heard it called that), and coach their teams in ways to improve.

Probably most importantly (in my opinion), we preach (read=culture): learn by doing, measure EVERYTHING, and always be changing. The tools and education have been useful as long we have believed what we preach. 

I have met so much resistance to "lean". Other senior leaders in our company view it with skepticism either from failed attempts at other places they've worked or they've heard from other's experience. 

My facility outperforms all of our other facilities and our executives continue to try to figure out what the "secret sauce" is, but I am hesitant to tell them it's lean based. Instead, they pick out some of our visual boards and apply them other places and I'm happy enough with it. 

You have the power to apply it where you are at. Don't view lean as a "thing" that everyone has to get on board with before everyone will try it, just have it's principles guide the way you work and manage. Lean principles are counter intuitive but so beneficial so show the benefit without the "program" and people will choose to operate that way. There will always be skeptics, but it's not "lean" they are skeptic of, it's change. Lean takes the blame for a lot of other problems. 

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Art byrne December 12, 2018
1 Person AGREES with this reply

Jedhi, thanks for your great addition to the discussion. As you point out, what you call it is not as important as what you do. Learn by doing is very important as is having the leadership involved in a hands on way making improvements and teaching everyone how to see and remove the waste. You are doing all the right things. It is good that other parts of your company are starting to copy what you have done. Perhaps if you create a name for it that sounds good and fits your company culture your approach will be adopted company wide. Good luck and thanks for your input.

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Jennie December 18, 2018

Hi

Thank you for an interesting post. I am working as OEL/KPO and it is always a challenge to sit in the middle of the company and motivate both the management team and employees. Working with you and meeting you working in my former company gave me a good experience how important and helpful it is to have the Lean knowledge in the board giving guidance and spreading the Lean culture to the management team and down to us working on the shop floor. This post reminded me and now I know I need to work harder on getting all in the managment team in the same direction before I can motivate the rest, I need their support to get to the next level.

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art byrne December 19, 2018
2 People AGREE with this reply

Jennie, thanks for your comments. I'm glad that you enjoyed the post. Your right of course that driving lean from the KPO position is a lot more difficult if you don't have the full support of the entire management team. My suggestion is to try and get them on as many kaizen teams as possible so that they can start to "learn by doing." In addition, the more success you can have with the kaizens that you do the easier it will be to get their attention and their backing to do more.

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