If you want great teamwork at any level, the incentives have to be based on teamwork. There are a hundred ways in which misalignment of sub-systems can undermine the best intentions of any change process.

When many companies begin their lean journey, they may not realize that both Honda and Toyota started their operations in the United States and other countries outside of Japan with a greenfield site where they designed the plant layout, organized the equipment, aligned their suppliers, hired all of the managers and associates, and trained them in their way. They created a unified whole-system whose parts were all aligned to the same philosophy. They were not changing a culture, overcoming resistance, or redesigning existing facilities. However, this is entirely different than the challenge facing most companies. Toyota and Honda succeeded because they had a unified, whole-system that they built over time and for which they have common understanding and commitment at every level of the organization. In that sense, they had it easy. 

The Problem with Problem-Solving

We have been introduced to many problem-solving models as the solution to all ills. Whether it is Six Sigma’s DMAIC, or the Shewart Cycle of PDCA or PDSA, or the A3 problem-solving model, they are all predicated on the idea that there is a specific problem to be solved. Why do you think there are so many problems? Could it be that there is something more fundamentally wrong?

Problems are within the current state system. They are by definition history. Transformational change is not problem-solving. It is designing the whole-system to meet the needs to customers and the future environment. It is an act of creating something, not fixing something.

Paths to Lean Organization Transformational change is about proactively creating the future organization and system. It asks, “Given the future environment, the technology, the market and social changes, what do we need to be like in the future, and how do we create that future?” It is designing a fundamentally different house than the one we are living in. Yes, there is a “problem,” but you won’t find the problem by fixing every rash and headache. The problem is that the design of the organization is not suited to its current or future needs.

Transformational change is a process designed to create significant change in the culture and work processes of an organization and produce significant improvement in performance. If your organization has a relatively traditional culture, you need transformation to engage your people, gain understanding and commitment to change. If you only need to make small improvements, to engage people in continuous improvement, you do not need whole system architecture. The American auto companies desperately needed to make significant change in their culture, but instead of a serious approach to analyzing and changing the culture, they opted for a less threatening and less dramatic approach of small groups working on small improvements. It was too late for that.

If you need to align your organization and culture to your strategy, you need whole-system design. If the organization creates walls and barriers to the flow of work, you need whole-system design. If the market place is changing significantly and your organization needs to respond to changing technologies, customer demands, or regulation, you need whole-system design. And, if you have had difficulty implementing change, gaining commitment from your own managers and employees, you need whole-system design.

Lawrence M. Miller has been doing organizational change consulting for 35 years, beginning with his work creating a free economy in prisons. He has worked with Honda, Shell Oil, and dozens of other corporations. He is the author of 10 books, most recently Getting to Lean – Transformational Change Management. His website and blog is www.ManagementMeditations.com. He can be reached at LMMiller@LMMiller.com.