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Ask the Expert- Lean Leadership: Lessons I’ve Learned from Failure

Two situations shaped the mindset I would use for continuous improvement throughout my career.

Question: Lots of continuous improvement and lean books/people say you learn as much from failure as you do from success. You’ve been in the industry a long time. Can you give a good example of how a failure (or failures) turned into a learning experience for you or your team?

Answer: What a great question. Of course, there are lots of specific examples I could cite. There is so much learning that occurs naturally all along the pathways of a CI journey. But there are two major cultural situations that stand out in my career. Why? Because they shaped the mindset that I would use on continuous improvement as my career progressed into executive leadership positions.

The first important lesson I learned in the early years was that leaders often don’t listen very well and, as a result, miss opportunities to involve others in the problem solving of the day. There seemed to be an expectation in the culture that leaders were supposed to be smart enough to solve any problem and their people had been “trained” over the years to defer to them. (Of course, nobody was that smart then any more than they are today.)  Because of that paradigm, however, I observed that the leaders tended to perform their jobs one or more levels lower than what they were being paid to do. One of the most damaging outcomes of this behavior was the blame game that took place during interactions between first line supervisors, engineers, quality inspectors, schedule dispatchers and expeditors. For nearly every dysfunction that occurred in the shop, the machine operators took much of the blame.

The paradigm was simple: Operators make a lot of mistakes every day. The evidence was obvious: high scrap rates; huge and a never-ending rework backlog; very high indirect costs involved with repairing or scrapping of the materials. Another major contributor was that poor machine utilization was causing higher costs and lots of late deliveries and reschedules.  Work-in-process inventories were extraordinarily high with the materials “stuck” on the shop floor. Finished goods inventories were excessive. Buffer inventories were put in place to provide some protection to minimize the impact on customer delivery promises. In spite of this enormous waste of cash, on time shipments were mired in the low 80s.

The supervisors and department managers met to look at all the scrap on a conveyor belt first thing each morning. There was little data involved. Just piles of scrap with tags on each material type so the scrap could be properly costed and reported. Meeting attendees’ questions rarely had any basis in fact but represented the opinions of supervisors, engineers and inspectors. Operators never attended these reviews. The lack of good data prevented any understanding of root cause. It was the same people’s opinions every morning based on experiential “knowledge.” These meetings were almost always a complete waste of time. There was simply no good process being used here for actually getting to root cause and solving the problems. It was a mindless, endless circle of frustration.

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The good thing that came out of these experiences was that, serving in direct manufacturing leadership roles, more direct interaction with hourly people in four departments was a great learning opportunity.  I also got more comfortable diving more deeply into shop-floor issues, seeking operator input. I developed a rapport with operators. I no longer heard only the input from management. If it was a problem worthy of management involvement, then getting operator input became part of the process. Over time, it became more natural for lower level leaders to seek operator input first, not last. The conclusion was that hourly machine operators were not the problem.

Rather than making a short story longer, suffice it to say I communicated and behaved with the following mindset for the rest of my career.

Most problems on the shop floor are sent there from somewhere else. Most likely they were sent there by a salaried person in an office or perhaps from an indirect hourly person in a support role.

Here are a few common examples: The engineering change notice (ECN) process was very poor. Often job set-up instructions weren’t updated in a timely way if at all. Accounting didn’t always receive cost changes. Production control wasn’t getting rate changes. Sub-quality raw materials had gotten through a poor process in receiving inspection, causing excessive scrap and/or slower run speeds. Parts were run oversize due to poor tooling maintenance processes. New suppliers of raw materials did not prove their materials in trial runs before schedules were committed to production. Also, wrong schedule information, customer orders entered wrong, and other issues with a poor order entry process, as well as sales taking orders that were not manufacturable without costs well above the cost that had been assigned in accounting. Et cetera. Et cetera.

And all of this had a direct impact on these support groups’ largest internal customers: the machine operators where the company’s product value is created.

Conclusion: Lower level salaried and indirect hourly folks aren’t the problem either. Ineffective leaders and dysfunctional processes are. So what else did we learn?

In addition to problem analysis and corrective action methods, changing the culture is imperative to set the framework for sustaining CI. Here’s how we caused a change to the narrative.

Culturally, leaders must elevate their expectations. Process issues persist because people get so wrapped up in the daily routine of crisis management that they stop thinking and waste the day applying chewing gum, bandages and baling wire to temporarily do a workaround on a bad process.

Positive change will only start if each leader stands up and says ENOUGH! Make it OK for your people to stop coping with dysfunctional processes every day. Our jobs are to train our people to map broken processes, find the disconnects and solve the problems! Closed loop, integrated processes are the solution. That’s what salaried employees must be taught to understand from Day 1. But, unfortunately, most managers I’ve known don’t think and act that way instinctively, so the dysfunction lives on. Very frustrating.

I strongly believe that operators typically come to work every day ready to do their jobs well and hoping to have a good day. Most salaried and indirect people hope for the same. What is usually at the root of the chaos that ensues points to poor processes that make it nearly impossible for anyone to have a good day.

Leaders must be trained to think the right way and train their teams to use process/value stream maps, accurate metrics and other problem-solving processes, not opinions, to really solve problems by improving processes. As Deming said, “In God we trust. All others bring data.” (I would respectfully add “and good process.”) The challenge we used with our salaried and indirect hourly associates was simply this: Our jobs are to eliminate all the reasons why operators have a bad day.

Second Lesson Learned – the Hard Way

The second lesson I’ve learned the hard way is that CI journeys cannot be sustained without C-suite and board executives being committed to lead this career-long journey of continuous improvement. That means making certain that both the culture and expectations for CI prevail through leadership changes, market collapses and any other obstacle that presents itself.  

My first experience was totally bottom up. After I left, there were numerous leadership changes there over the years there that included multiple CEOs, VPs of manufacturing, plant managers, etc. In less than 10 years a plant that I would have put up as among the best in the world was in shambles and ultimately closed after another decade of decline.  

At my second company, General Cable, I had a strong CEO who supported the CI initiative I had once again started from the bottom up. The performance of the business was very poor at the start so it was relatively easy to harvest low-hanging fruit and show significant improvement in bottom line and cash contributions. But we hit a point where the culture had to be changed. The company was a collection of wire companies that had been added via acquisition, and every culture was different. The differences were palpable while walking on plant tours and interacting with local management and hourly employees. Clearly, we needed to put one face on manufacturing so that the thinking and the processes and the metrics could be standardized to improve the company long-term. Equipment was very similar, but the processes and standard work were very, very different.  

The big test came during the North American leadership team (LT) meeting a couple of years after we launched the CI initiative in operations. Based on the results, a peer raised the question of whether we should be considering a culture change for our company that would involve everyone on the payroll. The CEO angrily responded, “We are NOT going to change the culture here.” You could have heard a pin drop when I spoke up and said, “Well, we are going to change the culture in manufacturing!” To the CEOs credit he calmed down, I didn’t get fired, and he thought about the comments in the LT meeting and soon after became a very strong voice and supporter of CI and the necessary culture change while exhorting us in operations to lead the way.  

Later when that CEO retired, the new CEO, who had been with the company a long time, provided strength, commitment, support and continuity. He led the board to making CI a global strategy. He also made it clear that all functions, not just operations, were to be fully supportive and actively engaged in improving processes in their own functions and businesses. That was the culture until his retirement a few years ago.  

From a distance, I have observed some radical changes in that company over the last two to three years at the top of the organization and am aware of some dramatic effects that have resulted culturally. I’m hopeful that the changes at the top, along with the pending sale of the company, haven’t derailed a CI journey in what would be its 19th year in 2018. Nearly half of CI initiatives are off the rails is less than five years and less than 5% of CI journeys last beyond 10 years. I wonder. Is the culture so deeply imbedded that their journey can survive?  

This learning from my experience, and from the statistics, makes it plain as can be. Absent board and C-level continuity, their strong support and active engagement as company leaders, CI will not sustain. It’s a test that so many companies have faced and failed over the last 30 years. What will be the outcome in this case? Will General Cable become just the latest statistic or will new leaders persist in sustaining a CI culture that will continue to improve the business forever with robust engagement from the shop floor to the boardroom?

The only thing I know for certain is that some of us will refuse to be silent and will not stop trying to create world-class leaders and companies through continuous improvement.

“Lead, follow, or get out of the way.” --Thomas Paine

“It’s all about leadership. It ALWAYS all about leadership!" --Larry E. Fast

Larry Fast is founder and president of Pathways to Manufacturing Excellence and a veteran of 35 years in the wire and cable industry. He is the author of The 12 Principles of Manufacturing Excellence, A Lean Leader's Guide to Achieving and Sustaining Excellence, 2nd. Edition.

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