I’ve dealt with this challenge in two main categories: 1) Private equity-held companies where I was an operating partner and chairman of four to five of our portfolio companies, essentially facing the resistance to lean faced by most traditionally run companies. 2) Companies where, as CEO or group executive, I was directly in charge of the strategic direction we would pursue.
How do you get the CEO to embrace lean?
I’ve found that the biggest barrier to adopting lean almost always comes from the CEO. Occasionally you would find that the CEO was uncertain about taking the lean path, and his senior staff proved to be the biggest resistors and could almost always talk the CEO out of making the switch. Their argument that “this will never work here” is hard to overcome, especially when backed with few examples that relate to your company or industry.
This resistance should surprise nobody. After all the CEO and his senior staff succeeded by following a traditional management approach. They were taught by and rewarded for the prevailing operational status quo, which only reinforces their belief that they are on the right track and there is no need to change. Their resistance only grows in the face of lean requiring major change.
The conventional personality type and management style of most CEOs creates additional barriers. In my opinion, approximately half of all CEOs are either insecure individuals or adhere to a rigid top-down management style. They don’t like surprises and if (when) they occur they need someone to blame. While this default mode may work in a traditionally managed company it is totally incompatible with lean. Moving to lean is a constant series of “leaps of faith” where every change you make brings with it the thought of “but what if this doesn’t work?” If the CEO can’t stand surprises, then getting him/her to move to lean is almost impossible.
At Wiremold, we were written up in many articles and influential books like Lean Thinking and Gemba Kaizen after we made some progress. This brought out the industrial tourists and we soon found ourselves giving a lot of plant tours. We wanted to help others, and so while this was fine at first, eventually we found that doing the tours was interfering with running our business. We knew that no company that came to visit would be successful in implementing lean unless it was driven by their CEO. So, we added a simple new rule: you can only come to visit if you bring your CEO. Surprise, surprise, all industrial tourism stopped immediately.
What can you do about this? In the private equity world, when I was chairmen and owner of various portfolio companies, the solution was simple: fire the CEO. This happened quite frequently as our time horizon for an investment was only about five years. We couldn’t wait for the CEO to come around—if they ever would.
Every time I give a talk on lean the first question I get is invariably “How do I get my CEO to implement lean?” My flip answer is “Go get a job with a lean company.” This is only partly unfair, as most of their CEOs will never adopt lean. Even so there are some steps that can be taken that may get their CEO to come around eventually.
Start by trying to educate your CEO about the advantages of lean. There are many great books on the subject, starting with the seminal books Lean Thinking by Womack and Jones, and The Toyota Way by Jeffrey Liker, and even my two books, The Lean Turnaround and The Lean Turnaround Action Guide. Next, get him to visit a couple of lean companies and see what they have done. Then have him attend a weeklong kaizen at another company to see the power of lean firsthand. After that, line up a good lean consultant and convince the CEO to run one or two initial kaizen events in your facilities.
If none of that works, and it probably won’t, the next best thing is to just start lean in an area that you control in your company. For example, a plant manager can start lean in her plant. Don’t make a big deal about this. Do it quietly but just do it. After a while the dramatic improvement in results will start to get recognized, and the CEO will ask how did you do this? Once it is understood that it was due to lean it will be hard to deny “that lean will never work here” and you’ll be on you way.
How do you overcome change barriers when the CEO is lean and the company is not?
This case is more personal to me as I faced this challenge as group executive at the Danaher Corporation, and as CEO of the Wiremold Company. Expect resistance in these major areas: 1) senior management, 2) middle management, 3) shop floor supervisors and 4) the workforce and/or union.
Convincing senior management to move to lean is not all that hard once you lay out the expected results. After all, who is going to argue with the boss that “we shouldn’t try to get better.” Even so, most senior staff will assume that lean is simply a cost reduction program focused on the factory, leading your VPs of sales, finance, IT, engineering, and human resources to resist, arguing that it doesn’t apply to them. That’s not too hard to overcome; put them all on kaizen teams and explain that every part of the company must change. Your biggest issue with this group will be having them work as part of the true teams required in a lean setting. No more sales VPs running into the CEO’s office to complain about manufacturing! It will also mean getting them all to participate and give their opinions on every subject, as opposed to staying quiet when the subject is ostensibly beyond their domain.
Middle Managers and First Line Supervisors
In my experience this is where you will find the most resistance to lean. Lean changes the roles of these people the most, and they typically respond to their world being turned upside down by fiercely resisting. This way of behaving is not done intentionally; it is just that old habits die slowly as they say. To become lean, you must move away from the traditional functional organizational structure and to a lean value steam structure, a change that will cause enormous disruption in terms of jobs, responsibilities, and formal assignments.
At Wiremold, for example we had to pick value stream leaders in our transition to lean. For the most part our traditional functional foremen did not make the cut, but their extensive knowledge and experience were still extremely valuable. We eliminated the production planning department and the purchasing department by combining these functions into a buyer/planner assigned to each value stream leader, who sat on the shop floor next to their equipment. We also broke up our engineering departments and assigned our engineers to specific value streams instead. Lots of change, lots of confusion, lots of opportunity to resist.
On balance this worked very well, despite the disruption. The biggest resistance came from the front-line supervisors, who were used to giving orders, and whose style of leadership conflicted with our emphasis on teamwork and everyone working together. Because this was harder to see it was harder to solve. We addressed this by introducing an annual employee survey that focused 5 of the 30 questions on how your supervisor treated you. The responses highlighted the problems and gave us a chance to have a talk with the individuals and correct them.
The Workforce or Union
Despite popular myths about unions, my experience with the UAW at Jake Brake (our first lean example at Danaher), and the IBEW at Wiremold, revealed these two as cooperative partners. Sure, the union contracts added some extra steps and time, but for the most part the work force was never a barrier. The key was not treating them as “THE UNION”, and instead treating them like people and the key part of the team that they really are. After all, the best ideas for eliminating waste will always come from the people doing the work. Make sure that half of every kaizen team is comprised of hourly employees and that you get all your hourly employees on as many kaizen teams as you can, and you won’t have any problems.
Tackle Resistance Situationally
In a wide range of settings, I’ve found that resistance to lean can occur at all levels of the organization. There are big differences however, depending on whether the CEO is the lean zealot and driving change or whether the issue is getting the CEO to start down the lean path in the first place. Overall, I would say the biggest hurdle is getting the traditional CEO to start down the lean path. Unfortunately, in my opinion, about half of these CEOs will never be willing to take the leaps of faith necessary to become lean. Of course, that is good news for anyone competing against them.
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As always, very precise, comprehensive (systematic) and transparent.
Managing changes and human aspects is a vital part of Lean transformation.
Thank you, Art
Thank you for the article which I enjoyed reading. You may want to read my response to Dan Jones’ article, “Why Lean Remains a Superior Business Model”. I’ll try to summarise my main points here.
Can we blame the way the vast majority of CEOs and other senior managers think if their education and experience have been at the other end of the spectrum from Lean?
As I said in my response to Dan, the Lean movement seems to avoid taking on the B-Schools and what they teach in their MBAs. Do you know of an MBA degree which has as its foundation Lean? At best, Lean is taught as a forgettable subset of Operations. What is made worse is the strong influence of Fred W Taylor and Milton Friedman on the degree. Why would an MBA-educated CEO invest money in educating people with (to quote the lyrics of Sixteen Tons) “minds that are weak and backs that are strong”? Why would acolytes of that quasi-religion, Freidmanism, consider lifelong learning to be in the best interests of the organisation, its people and the communities in which they live if they are continually chanting the mantra, “maximise shareholder value” and looking for lower labour costs? You only have to look at the long-term decline of once-great companies like GM or Ford to see what Friedmanism does over time.
Lean has gradually moved from the Toolbox to the “softer” bits of Toyota’s leadership philosophy, for example, the emphasis on coaching using A3 as a great framework for dialogue. But does it make sense to expect managers and supervisors to be great coaches if they were never taught and encouraged to do this? We should heed the example of the Jesuits and their claim, “Give me the boy until he is seven and I will show you the man”. Does it not make sense to teach the “soft” bits of Lean to young people when they are around 16 before they enter the workplace? They could then follow your advice and choose organisations they can see are serious about Lean.
Owen, thanks for your great editions to the post. I agree with your analysis that we shouldn’t expect leaders to vary very much from what they have been taught and experienced. Getting this to change is the ongoing challenge for lean. Your example of MBA programs is a good one as most teach no lean or if they do it is just a minor elective. I don’t see any silver bullet solution here. At the same time there is hope as all of us who have been successful at lean came out of the same educational and working experiences you point out yet were able to see a better way and change. So there is hope but progress will continue to be slow I think.
Fabulous article, Art.
We wholeheartedly applaud your Value Chain Management leadership!
Global Managing Director
The Association of Value Chain Organizations
aka The BreakPoint Consortium Blockchain community
Phil, thanks for your nice comments. I’m glad you enjoyed the post. Art.
Thank you Art for highlighting the importance of leadership commitment. There is however, from my point of view also another factor influencing how an organisation handles lean transformation, i.e. the local culture.
The way people have been raised and guided through their personal and professional careers influences the way people look at things and how they cope with change.
If you have operators that were never allowed to change things because their supervisor “was always right”, it’s very likely they will not take any initiative to start implementing lean basics. Only when people are allowed to try and make mistake, learn from them and then retry, they will start embracing more and more lean.
Regardless the level of management one is in, leading is also giving the opportunity to grow.
After all, experience = the sum of all lessons learned from mistakes made…
Koen, thanks for your comments and examples. Your right that to switch to lean leadership has to not only be committed but understand that to be successful they have to totally change the culture of their organization. Lean can’t exist in a top down “shut up and do as I say” environment. Making sure all kaizen teams are half hourly and half salaried is a step in the right direction but it will take time for managers at the supervisor level to change the way they act and for operators to believe that their ideas will be heard. Without the CEO pushing to make sure this happens not much will change.
Stephan, Thanks for your comments. Yes you find the same resistance in the same places almost every where regardless of the industry or business. Keep fighting the good fight.
History doesn’t repeat itself, but it rhymes.
During WWII, Dr. Deming and others taught Engineers and line managers principles that dramatically improved building equipment for the US war effort.
During the Allied occupation of postwar Japan, General MacArthur fired all the business CEOs. A management training program for those who remained was titled ‘The Fundamentals of Industrial Management.’ Authored by Homer M. Sarasohn and Charles A. Protzman.
Dr. Deming and others helped these new leaders rebuild Japan’s industries in the 50s. At the same time, the US defense industry abandoned the lessons learned during the war.
That experience taught Dr. Deming that change must start at the top. In America, he would only work with a company if the top person was interested and involved.
Again, history doesn’t repeat itself, but it rhymes!
Dave, thanks for adding some great historical perspective. It is amazing how fast things can go backwards without the right leadership. Doing the hard work of becoming lean is impossible without the CEO driving it. No different today than during and after WWII.
Thank you Art, I am guilty of practicing Lean tourism 🙂 … until I got involved in a real Lean transformation… On the people side, I rarely experienced front line workers resistance and mostly from the supervisor up….
Ovi, you are forgiven for being an industrial tourist. In fact you should do more as there is always something to learn. It’s nice to hear that you have the same experience I have that resistance to lean doesn’t come from front line workers but from management.
When you required the CEO to attend tours; none would.
I was SO fortunate to be with Applied Materials in Austin back in 1999 when we started our change. Many positives. Much learned.
Most of Mgt from our CEO down got on board. The others who couldn’t, or wouldn’t change, left.
Thanks again for your articles.
Perry, thanks for your comments. You make a very important observation that executives who can’t get on board with lean usually leave on their own. We almost never had to fire the concrete heads. In fact it was to our advantage to help them find a job with one of our competitors to keep them from becoming lean.
Very true, the article describe exactly what lean practitioners have to face all the time
Bill, thanks for your comments I’m glad you enjoyed the post. It is amazing how the same issues and resistance are found just about every where.
Thanks for sharing your experiences.
That’s the best explanations and comments on resistance to change to Lean I have read or heard in 20+ years of making change by using Lean.
Thanks for sharing your experiences.
Many things I have experienced just came into sharp focus.