How do we mid-level managers convince the CEO and senior management that adopting lean practices is worthwhile?
Dear Gemba Coach,
Thanks very much for your insights during the recent webinar on the business case for lean. The webinar was particularly useful for us because it raised many questions to investigate and provided a lot of common sense insight. I am an administrator taking lean certification training at a primary care network. How do we as mid-to low level "operators" convince our CEO and senior management that adopting lean practices and thinking are worthwhile in our context?
Thanks for the kind words on the webinar, and the question. As I said during the webinar, my experience is that you can’t. Now I’ve been saying this for years: as a mid-level manager, you can’t convince the CEO and I’ve gotten a lot of flack for it because people tell me it’s too easy a response and that if it’s true it’s really depressing, and we might as well all go home. I accept these two criticisms and will try to make amends by going further into the fundamental problem, and try to convince you that accepting the lay of the land is not depressing, but opens up a different field for action and lean success.
First, we need to back up a bit and clarify the difference between doing lean, which is running kaizen events and applying the lean tools, and becoming lean, which is transforming the organization to better care about patients with less waste of resources by involving all health professionals, from doctors to janitors. The CEO really matters because when they’ve figured out how to become lean, then they know how to do lean in a smart way and get the results. If they haven’t, the workshops will lead to random improvement, high expectations, and the usual disappointments we’ve seen time and time again in the past 15 years. As my father, my sensei Orry Fiume, his boss at Wiremold Art Byrne, Pat Lancaster from Lantech, also a Lean Thinking case, have taught me, becoming lean happens when the CEO sees that lean is the strategy, not a tactic to implement his or her strategy (that’s the best case when they do have a strategy), or a bunch of tools to somehow “improve” the organization. This why the CEO is key, and impossible to convince: how will you, a middle-manager, be in a position to convince their CEO they should adopt a new strategy? Not likely. They’re the CEO because the shareholders have entrusted the company to their care, and your job is to help them execute the strategy they’ve picked – not the other way around. That may be a bitter pill to swallow if you see the lost opportunity as the CEO ignores the lean promise, but, hey, better deal with it upfront and relax about it. (Don’t stop reading right now, in the second part of the column I’ll go into what can be done).
Lean Strategy Explained
What does a lean strategy look like at the CEO level. In my father’s terms, a lean strategy is understanding the typical problems and typical solutions of your business. It’s NOT copying Toyota, it’s using the Toyota Production System to develop your lean thinking which is constantly to clarify what are your key challenges (typical problems) and key worker–level kaizens to improve on these challenges (typical solutions).
For instance, I mentioned the CEO of the construction company during the webinar, and a shortlist of his typical problems:
- Leveling order intake
- Improving right first time and quicker mistake detection and correction
- Better hand-off between trades and quicker rotation
- Better supplier selection
- Greater attention to customers.
There are a few other items on his strategic list such as:
- Reducing the work content of every new construction through better engineering choices
- Innovating to reduce the energy consumption of every building
- Maintaining a healthy pipeline of motivated project managers,
There aren’t that many more. Overall his strategy is centered on five to 10 “must do, can’t fail” challenges, and the experience to know how, exactly, these challenges express themselves on the Gemba. In front of each item on the list the CEO is constantly on the Gemba pushing his guys to find smarter and smarter detailed, operator-level solutions to these generic problems. And this is where the lean tools are so precious as they frame this conversation.
Lean for the CEO
For a CEO, a lean transformation has typically three phases, each equally hard in different ways. First, digesting the lean thinking literature and using Toyota as an example to figure out what the main challenges are; second, when these have stabilized, work relentlessly at sharing them on the Gemba with workers and actively look for local solutions and think of their impact; and third, after doing this a few years, revitalize the approach by reformulating the challenges or seeking new ones. Trust me, it’s hard – and unless your CEO is eager and willing to go down that path, the whole lean language doesn’t mean much beyond delegating others to do some “improvement.”
The first phase is particularly challenging as this goes against the grain of executives with bright ideas that rank-and-file have to execute. Here the CEO has to work at figuring out exactly what are the typical problems constraining growth and holding the business back. Rather than do this at the strategic thinking level, the CEO entering the lean world needs to do this with a sensei on the Gemba. Again, that ain’t easy. This is where lean tradition can really help. For instance, in the healthcare field, follow in the footsteps of the one man who has a proven lean transformation, John Toussaint, M.D., and who has written a seminal book about how to apply lean hospitals: On the Mend. In the book he outlines perfectly the discovery method for healthcare:
- Focus on patients (not the hospital or staff) and design care around them
- Identify value for the patient and get rid of everything else (waste)
- Minimize time to treatment and through treatment’s course
Now this seems pretty straightforward, but when hospitals “do” lean what do they typically focus on? Cost reduction, bed utilization, IT planning systems, and probably a training program for all their ward managers to teach them about lean. In other words, they hope the lean tools will help them solve their issues without challenging their understanding of their challenges (I’ll give the game away: it won’t). Where is the patient? Where is the value? Where is the lead-time? A CEO keen to become lean would start by the emergency ward and simply look at how patients are treated there and ask himself or herself: are we focusing on the patient here, or are we “optimizing” hospital resources? She would go into a treatment room and ask herself: is all here adding value to the patient or are all those shelves and stuff stacked here because I can’t get them delivered just in time from my central logistics? She would look at cardiac arrest incidents and ask herself how long it really takes for a team to reach the patient and save a life? These are the hard questions you need to ask yourself at the CEO level until you’ve figured out, slowly and carefully, which questions exactly apply to your hospital.
As the questions accrete, it becomes easier to focus on specific operator behaviors that create the problem. Mostly, we’ll find that worker-level actions are the echo of some policy somewhere along the line. Nurses keep their own reserve of critical supplies (and thus creating obsolete and hygiene risks) because they’ve been caught out too many times with late deliveries from central stores. Doctors turn out late to surgery because they’re know every one is never ready on time, so why bother, and so on. And as this becomes clearer, we can then work on behavior-improvement activities, using all the tools available in the lean tradition: spot measurements, kaizen workshops, checklists, dojos, etc.
Actions for Lean Managers
As a middle manager, we’ll agree that you’re unlikely to get your CEO to take that plunge. So what can you do? Well, you can get promoted. I’m not kidding, you can start by using lean thinking to improve your own activities and earn respect and progressively be listened to.
I’ve known for years a guy who’s been a lean maniac in healthcare. He used to work with a large consultancy in hospital contracts, and decided that the only way to really change things was to be part of the hospital management. He got himself hired as improvement director of a hospital, but ran into same old, same old: no one would listen. He finally stopped trying to convince anyone of “lean” and started doing his job. He narrowed down his job to working with the few managers in the hospital who seemed open to improvement. In the end, this came to (1) starting surgery on time in the theatres, (2) patient welcomed at admissions, (3) on-time delivery of sterile material.
It doesn’t sound like much, but in each of these cases, he was able to both show significant results (a 20-minute improvement of time of first incision in the operating theatres has a huge financial impacts) and nurture relationships. Progressively, the COO gave him more portfolios and greater responsibilities (not necessarily a “gift”), and as he did so, he also started being cautiously curious about how this chap solved problems with counter-intuitive solutions. Two years later, the COO went to a lean conference on his own and came back as if he’d seen the light. How do we do this lean stuff of yours? he asked.
You can lead a horse to water, but you can’t make it drink. You can’t convince powerful people of anything, they have to convince themselves. What you can work on, is to have greater credibility because of your results, your relationships, and your good sense. The answer to your question is to stop trying others to do lean, and commit to become lean yourself, in your day-to-day job, with your own staff. In the construction company I mentioned earlier, no one knows they’re doing “lean.” Only the CEO reads the lean books and goes to lean conferences. Managers only know they have difficult problems to solve and have to involve their shop-floor workers to solve them.
You can’t convince your boss to do lean, but you can become more convincing yourself by doing lean rather than talking about it. Few consultants ever get lean because they’re always thinking about getting others to apply it, but not them. As a result, their own learning curve stagnates. Don’t fall into that trap. Lean yourself before you try to lean others. In Art Byrne’s words: “Don’t just do lean; be lean.”
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What's wrong with taking a tools approach to lean management?
Dear Gemba Coach,
I keep hearing that a tool approach to lean is wrong, but tools deliver results – how can that be wrong?
How effective is a book club?
How effective is a book club?
It really depends where you want to take your lean journey. What are you trying to achieve? A core part of kaizen is not just looking for the results of the physical improvement, but the opportunity to grow, develop people – or self-develop, so that the learning can be applied to every other work situation.