Thursday, October 29, 2009

Lean Management – Why Care?

Maximizing business results through the application of Lean involves two requirements:
  1. continuous optimization of the value creation process
  2. managing “fair treatment” around change*
Technical Lean methods deliver the first requirement. Lean Management accomplishes the second. 
Hoshin Kanri integrates both requirements before, during, and after critical cross-functional improvement initiatives.  When all are executed skillfully, Lean drives positive change and delivers benefits to every level of the organization.  In other words, everyone experiences “good” change.
*Jim Womack, leader of the Lean Enterprise Institute, recently introduced this idea to the Lean community using the phrase “making everyone whole”.  In other words, ensuring no group ends up worse-off after a change initiative.
To learn more about how to apply this idea to your Lean project or initiative, please see our presentation Nobody Likes Bad Change elsewhere on this blog. 
In more detail …
A large business organization is a complex system, made up of a collection of interconnected groups.  The groups work in a cooperative, structured arrangement which is influenced by the behavior of each of the groups. 
In this environment, optimizing business results requires more than a purely technical approach.  The human requirements of the system must also be addressed by managing the perception of “fair treatment” throughout the groups.
Why? When the people within the groups perceive they are being treated fairly, they stay focused on executing the value creation process to  drive business results.  When the perception of “fair treatment” is disrupted, people become distracted and begin to engage in wasteful pursuits that have nothing to do with creating value for the customer.   
What does this have to do with Lean?
There are two sides to the complete Lean equation - a technical side and a management side. 
The purpose of the technical side of Lean is to continuously optimize the value process to deliver increasingly stronger business results.
The purpose of Lean management is to maintain the perception of fair treatment as the value process is improved. (assuming the “fair treatment” perception is present in the first place) 
What does Hoshin Kanri have to do with this?
Hoshin Kanri integrates the two sides of Lean and establishes an important feedback loop.  The feedback loop assures participating groups “fair treatment” is being protected or improved, and not damaged, as process improvement takes place.  This keeps things operating smoothly, even as process optimization drives change into the system.  Participants in Hoshin Kanri managed change efforts experience less stress, accept change more readily, and perform their jobs better after the fact. 
In short, Lean management and Hoshin Kanri strategy deployment protect the participating groups, at every level of the organization, from bad change.  
Note:  As I have done with other posts, I want to thank the Lean Enterprise Institute  for their efforts.  I am pleased to see they are promoting Lean management as part of the development of a new Lean optimization language platform.  
To learn more about this topic and Systemental’s role as a leading Lean service provider, please click here.   
If you would like a Lean resource, designed to help Lean professionals and business improvement leaders stay at the head of the pack, you can sign up for Systemental’s periodic newsletter here

1 comment:

Jamie Flinchbaugh said...

Thanks for sharing. We have found consistently that most lean leaders really don't know how to lead, particularly cultural change. Many of them come from operations or engineering, and I can personally attest that most engineers aren't trained in change management.

We believe that there is no such thing as organizational change. People change. Eventually enough people change within the organization that you can call it organizational change. You change one heart and one mind at a time.

That's why we created the Leading Lean course (Nov 11 at - specifically to give people change agent skills that they need on the lean journey such as how to you sell ideas to people, how do you coach, how do you build a network of change agents, how do you change a culture, etc. These are important skills. I like to believe these skills are the difference between being a lean expert and being a lean change agent. One knows stuff, the other makes something happen.

Jamie Flinchbaugh