Changing a Culture, Top to Bottom

     With the latest conflict in the Middle East comes a renewed discussion on the world stage about culture and the role it plays in societal behaviors. Here at home, many of us find ourselves facing our own cultural challenge -- the battle to change the culture within our own organization. We are discovering that the only way to achieve a “true and lasting” Lean enterprise is to cultivate an environment of continuous improvement throughout the workplace. For many of us, this means a real change in our existing organizational culture.

A majority of Lean implementation efforts fall short of their goals because organizations are unable to establish a culture of change that allows the gains achieved to be sustained for the long term. Most organizations spend the bulk of their training budgets educating their workforce on the technical elements of Lean, such as changeover, value stream mapping and designing cells. At the same time, several studies have demonstrated that even when implementing the best available methods, most businesses relying principally on managers and engineers for improvement attain only about 3% annual progress. Results have shown that the key to dramatic, broad-based, long-term success is establishing a culture where everyone knows what to do and works both as teams and as individuals to make it happen. A pervasive culture is the basis for individuals to decide which actions are right and which are wrong. It defines how groups act together and how individuals act alone or as part of the group.

So what exactly do we mean by “culture,” and how do we recognize it in the business world on a day-to-day basis? Culture in business is exactly the same as culture in society. It defines the common expectation for how people will act, as individuals and as members of a group. For our purposes, consider culture within a work organization to be the sum of peoples’ habits related to how they get their work done. People often talk about their company’s culture as a reason why they can or cannot do something; consultants refer to an organization’s culture as enabling or inhibiting change or resistant; and annual reports and industry analysts will often refer to a company’s culture as an invaluable asset.

However, we need to be a bit more specific in how we view culture in the workplace – both on the shop floor and in the executive suite. Lean culture is a set of habits and routine practices that focus on the health of a production process, be it an office or factory. It is an attitude that embraces process glitches and failures as the best places to engage in process improvement, and in which nearly all in the workplace look at things with “kaizen eyes.” It means looking for ways that make work easier, safer, more efficient, of higher quality, and more interesting for those performing the work. A Lean culture is also a visible culture, where the status of processes can be discerned at a glance, where expected versus actual performance for virtually everything is defined, documented, and visible, and where production and leadership processes and procedures are standardized.

Simply put, a Lean culture is a company-wide philosophy of continuous improvement. Everyone in the organization, from the CEO to those responsible for machine maintenance, has to be challenged to use their initiatives and creativity to constantly solve problems. A Lean culture is a journey that organizations take - using Lean principles, concepts, and techniques designed to eliminate waste - to develop a never ending improvement environment. This means that organizations have to invest more time and money into their employees through education and learning, including training in Lean principles, team building, and problem solving.

Experts estimate that 80 percent of becoming a Lean enterprise is culture-related. Without employee support, you can’t make many, if any, substantial changes in your organization. Culture greatly influences many facets of daily productivity and improvement. In fact, the way employees work, their attitudes toward work and change, their relationships with each other and management, and the way change is introduced, embraced and tackled are all defined by the organization’s culture.

Getting Started
Although cultural change typically evolves as technical changes take place, the challenge comes in creating, building and sustaining a company-wide improvement environment, a true Lean culture. That means getting everyone in the organization to live and think Lean every day; to actively support and buy into Lean concepts and philosophy; to be in a constant search for ways to improve processes and provide increased value for customers. Truly it is a journey, with many things changing, such as the information you rely on, deeply ingrained work habits, day-to-day and even hour-to-hour routines, and the way you think about managing work and productivity. All of these need to be transformed to achieve a true Lean culture – a mindset – and ensure long-term success. And the key elements typically include changing a leader’s leadership philosophy, while empowering the workforce to recognize the need for changes and helping to make them.

Leadership
It has been said about Lean that, “Nothing changes until leader behavior changes.” According to a survey by Stiles Associates conducted at the EASTEC Advanced Productivity Exposition, when asked to identify the most important personal characteristics of Lean leaders, respondents cited passion, enthusiasm and a hands-on policy. In the final analysis, leaders very often must force themselves to forget what they have learned in the past about management and leadership philosophies and adopt a new way of thinking. This new action and how they respond to employees are crucial ingredients in successful Lean conversion. These leaders must teach, inspect for, reinforce, and hold all accountable for management practices consistent with the principles of Lean.

The first step in creating a true culture change involves changing how and what leaders communicate. Management gets started on this path by carefully defining and translating Lean goals so they are not only meaningful to each individual or team, but can also be objectively observed as implementation proceeds. People need and thrive on clear goals, but also require the new skills of identifying and resolving opportunities for improvement. They need time to work on improvement, and need access to resources to cause the change that results in improvement.

The best Lean leaders also recognize the importance of developing strong internal teams to help steer the company and evaluate and streamline processes. They work on teambuilding and internal communication to improve the culture and to realize continuous improvement. Lean leaders harness all the brainpower that employees might otherwise keep to themselves. It takes a good coach to bring out the best in employees and foster an organization that is continuously learning. Leaders need to:

• Recognize that everything that happens is a learning opportunity and make people aware of that.

• Help employees find answers to questions rather than just giving them answers.

• Encourage people to try new things and take risks.

• Don’t criticize or penalize employees if their risks don’t pan out.

• Praise in public, and critique in private.

• Give people the tools they need to find their own answers, and to succeed.

Structure
Management must also establish an adequate structure (organization) to monitor and manage Lean implementation elements. This allows the improvement process to be visible so management can be certain that improvements are occurring at all places, and so managers can ensure that each improvement is compatible with other improvements being made. To watch over this process, each site/plant needs a full-time continuous-improvement leader (Lean facilitator) who reports to the plant manager. These individuals, as well as the plant managers, should receive Lean training so they are prepared to serve as continuous-improvement leaders. Everyone needs to be committed to this process. The key is to determine the roles and responsibilities that must be developed to meet the goals and objectives based on the organizational structure; then determine who is responsible and accountable for each of the bulleted task items.

This structure will also help leaders ascertain how teams are functioning and resolving interpersonal difficulties that impede progress, and it will enable management to learn how people think and feel about the improvement process and management's responses to it. It means each person and team is participating in the success of the business by making their own best contributions in collaboration with others doing the same.

Workforce Empowerment
Employee empowerment is the backbone of the Lean movement and depends on the right leadership. A unique breed of executives is required to create change and develop a bottom-up culture of waste elimination, continuous improvement, and customer responsiveness. A workforce of empowered employees is a place where each person either acting alone or as part of a team is able to autonomously make improvements that are compatible with the improvements made by others and which are beneficial to the enterprise. Absent such a shared understanding of how to contribute, it is common for people to fail to act, to act inappropriately or even to act in a way that appears good locally, but actually diminishes the overall effect.

It is important to note that all improvements must be beneficial to the enterprise, which means that people must have very specific goals when they undertake an improvement. Random acts of making things better are rarely beneficial to the enterprise and take time and resources away from the opportunity for a better improvement. Also the improvements of each individual or team must complement the improvements made by others. Improvements in one place that make things worse for others do not benefit the enterprise.

Furthermore, many people are fearful of taking unmanaged risks, and therefore empowered employees must be able to act with the assurance that their autonomous actions will be well received. They also require the more subjective elements of empowerment, for example, collaborative teams with whom they can work and managers they trust and who are open to their ideas and accepting of their results.

As can be seen, Lean is truly a management system, a culture, not just a series of improvement tools. Today’s leaders must continue to provide the “what” and “why” while allowing empowered process team members to determine the “how”. This requires a dramatic change in leadership philosophy and action, and the ability to trust employees with the skills and motivation to seek out and make real change. When organizations apply Lean tools in a vacuum without benefit of a well thought out, long-range plan and absent a broad-based and widely accepted “culture of change,” they find their efforts may bring pockets of excellence, but will fall well short of desired outcomes. Rather, with a sustainable culture that pervades and drives the entire enterprise, the many related successes that are achieved throughout the operation will always lead to improvement of overall business in a measurable way.

Productivity Inc. wishes to thank contributors to this article…

Mr. David Mann, Manager of Lean Management and Organizational Development, Steelcase, Incorporated. Mr. Mann has been involved with more than 30 Lean manufacturing conversions at Steelcase since joining them in 1987. In addition to his continuing work in their manufacturing operations, Mr. Mann also leads an internal team applying Lean principles to enterprise-wide business processes at the company. He is author of Creating a Lean Culture; Tools to Sustain Lean Conversions published by Productivity Press.

Mr. Raymond Floyd. Before his retirement in 2003, Mr. Floyd was the (worldwide) Manager Manufacturing Services at ExxonMobil Corporation. Prior to assuming responsibility for worldwide manufacturing, Mr. Floyd held positions as Vice President Exxon Chemical Trading, worldwide Business Unit Manager for synthetic rubber and Site Manager of the Exxon Baytown Chemical Plant. Prior to joining ExxonMobil, Mr. Floyd spent 10 years with General Motors. Today Mr. Floyd is an instructor working with organizations to establish and manage a culture of improvement.

Ron Grundhoefer, Associate Consultant, Productivity, Inc. Mr. Grundhoefer began his career at Alcoa where he spent 31 years in various positions from Line Supervisor to Manager. He has trained and facilitated hundreds of teams in process improvement methodologies including: management teams, joint union-management teams, steering committees, design teams, problem-solving teams and self-managing teams. Mr. Grundhoefer has developed a suite of training modules in the area of Teambuilding, Team Facilitation, Employee Empowerment, Facilitator Development, and Conflict Resolution.

For more information on the topics covered in this article, please call us at 800.966.5423, or e-mail lean@productivityinc.com

Customer Service: “I’m mad as hell and I’m not going to take it any more!!” (The Sorry State of Customer Service)

Let’s face it, what passes for customer service today is abysmal. The product of any number of cost saving strategies, most companies have rung out whatever pleasure there once might have been in the experience. Today’s “customer service” is fraught with moments of supreme frustration and despair requiring prodigious patience from the customer. Is this what we want for our businesses? What good does it do us to spend our careers working to drive waste out of our production and administration processes in an attempt to better service the customer when our customer service functions are driving customers to the brink of insanity?

As consumers, we all know what constitutes good customer service. It is not a complicated thing. When we need assistance we hope to speak with someone who can quickly and easily take our order, update our account, or resolve our problem in a patient and polite manner. It is no more complicated than that. Why then do companies so often get customer service wrong?

The problem really stems from a lack of appreciation for the real value of customer service and a misunderstanding of the function as non-value adding (wasteful). This often leads companies to blindly reduce costs without an appreciation or understanding as to the consequences these changes have on their customers’ satisfaction and the true impact to the company’s bottom line.

Given the reality that providing customer service is a necessary part of running your business, it is imperative that you develop an appreciation for the substantive value of good customer service. Service which is both efficient (without waste) and effective (value adding) is a strategic advantage. All things being equal, customers will naturally gravitate to a company that provides a better overall experience because that has real value for them.

Investing in customer service is no different than investing in any other part of your business. If you are a manufacturer, you would not purchase new machinery based on cost alone. The cheapest machine is not always the best option. When purchasing a new piece of equipment, you buy the machine which balances value and cost; the one that has the potential to maximize the return on your investment, providing the maximum profit to your bottom line. Customer service is no different.

If a company is unable to reconcile the expense of providing good customer service with the cost of providing bad customer service, companies will continue to focus on minimizing the expense of delivering customer service thus further alienating the customers our Lean efforts work so hard at satisfying.

Contact with the customer is an opportunity to reinforce a positive purchase experience as well as provide you with a feedback resource which can allow you to refine or redefine your products or services on an immediate and continuous basis. The needs of the customer should never be perceived as a burden or marginalized in an effort to squeeze as much cost out of the customer service process as possible.

Happy, satisfied customers are repeat buyers. They generate positive word-of-mouth advertising, and can build a positive reputation for your company. But it is not enough for the customer to be satisfied with the product you provide, they also need to be delighted with the process of purchasing it, with the interaction with your service representatives during the set up process and with the service provided by technical support in the maintenance of it. The value of exceptional customer service should not be overlooked; it is immeasurable. Conversely, the cost of unhappy and unsatisfied customers can be devastating.

With a “delighted customer” stated as an improvement goal, companies must start to mistake proof their service processes with the same vitality they approach the production process while developing a genuine appreciation for the true roll customer service plays in the success or failure of business. When this is accomplished we all benefit; the company, the customer and society.

To learn more about applying Lean principles to your customer service and other administrative functions, please contact us.

Featured Event

Announcing the first ever...
Lean Manager Certification Program for Administration and Service Industries
February - April 2007

Lean implementation requires that organizations build their capabilities – especially the knowledge and skills of their people. That is why Productivity Inc., the Fisher College of Business at The Ohio State University and noted authors Beau Keyte and Drew Locher have joined forces to bring you the Lean Manager Certificate Program for Administration and Service Industries (LMAC-S).

This highly interactive and fully accredited program teaches a carefully sequenced arrangement of Lean concepts and techniques, specifically for use in an administrative environment and the service industry. Over three non-consecutive weeks, each participant will experience a series of learning modules focusing on Lean planning, deployment and implementation. In between the weeks of training, participants must apply what they have learned to processes at their own organizations and, in subsequent weeks, present their progress and results to the class. Participants who successfully complete the three-week training and mentoring program, pass the certification exam, and demonstrate successful implementation in their own organizations are then certified as Administrative Lean Managers. (Earn 12CEUs.)

Complete program details will be available soon. To be added to the mailing list to receive additional information on this program when it becomes available, please e-mail us at info@productivityinc.com.

11th Annual Lean Management Conference
October 30-November 3, 2006
Arlington, Virginia

Be smarter, be faster, be LEANER! Whether you are a new comer or an old pro, the Productivity Inc. 11th Annual Lean Management Conference can give you the

LEAN, TPM, and SIX-SIGMA

tools you need to start a new Lean implementation or breath new life into an ongoing Lean transformation. Join us October 30-November 3 in historic Arlington Virginia for our 11th Annual Lean Management Conference and learn how to reach, meet and surpass your strategic goals. Learn from some of the foremost Lean practitioners and network with your peers in this rare opportunity to expand your understanding of Lean and Lean transformation strategies. Whether you join us for one day or all five days, you will certainly benefit from the experience. Challenge yourself to advance to the next level. Click here for complete details

Workshops include:

• Creating a Culture Change through the 5S's
• Lean Flow in an Administrative Environment
• Value Stream Management
• An Integrated Approach to TPM and Six-Sigma

Today’s best practice requires an organization to establish flow in both manufacturing and administrative functions, while at the same time maintaining a high level of equipment reliability and creating a culture capable of sustaining the gains achieved. In this workshop series, gain insights and the tools needed to ensure these vital elements are in place and positioned for success. Click here to learn more about these events.

Lean Tool Awareness Certificate Program
December 4-8, 2006
Columbus, Ohio

Modules include;

• Planning and Implementing Lean
• Value Stream Management
• CEDAC – Team Based Problem Solving
• Visual Workplace (half-day)
• Achieving Quick Changeover (half-day)
• Lean Enterprise: A Financial Perspective (half-day)

Co-developed by Productivity Inc. and the Fisher College of Business at The Ohio State University, The Lean Tool Awareness Certificate program is a one week, fully accredited program that focuses on providing the knowledge base needed to understand and take part in the Lean transformation efforts in your organization. Earn 4 CEUs.

Click here for additional details on the program.

A Workshop Series on Optimizing the Value Chain
December 11-14, 2006
Tampa, Florida

Workshops include:

• Lean Supply Chain and Lean Logistics
• Value Stream Mapping, Shared Resources
• Lean Performance Measurement
• Lean Accounting for Lean Manufacturing
• How to Design and Implement a Kanban System
• Applying Lean and Six-Sigma to Product Development

Historically organizations have begun their Lean efforts solely on the production floor. Today, organizations are finding that such a narrow focus is not enough to get them into the game and playing at a level equal to the competition. More and more, organizations are realizing it is vital to consider the total value chain in their quest to improve and compete. In this new workshop series, we offer workshops that expand Lean implementation beyond the production floor with a focus upstream and downstream, both internal and external to the organization. Click here to learn more about these workshops

Enter our Raffle
Enter to win a 3-day registration to our upcoming Lean Management Conference being held in Arlington, Virginia in October.

Productivity Inc. delivers today's leading performance improvement tools and methodologies to enhance rapid, ongoing, measurable results. Whether you need one day of on-site consultation or facilitation of a total improvement strategy, Productivity can accelerate your pursuit of Lean Manufacturing and TPM in the US, Canada, Europe, Asia, Mexico...anywhere in the world.

Call us today and allow us the opportunity to work with you in your multi-cultural Lean environment.