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How Does the Leader’s Lean View (Cost Cutting vs. Strategic Capability Building) Impact a Lean Implementation?

Feb. 11, 2014
ASK THE EXPERT: LEAN LEADERSHIP  Have a question about lean leadership? Let Larry Fast tackle it for you.

QUESTION: Does the view that leaders have of lean, (e.g., tactical cost cutting vs. strategic capability building) impact a lean implementation?  If so, how?

ANSWER:  After devoting the first three responses to the topic of lean leadership at three levels of the corporate structure, we’ll field a new question, this time from another IW reader:  “Does the view that leaders have of lean, (e.g., tactical cost cutting vs. strategic capability building) impact a lean implementation?  If so, how?”

Great question…..and the answer is an unequivocal YES! 

The leader tips his hand early on this one.  As soon as you hear the word “tactical” instead of “strategic,” it’s pretty likely that the speaker is thinking short-term.  If the only interest on the part of the leader is to take out costs short-term, then it’s a complete misrepresentation of everything a continuous improvement (CI) agenda should represent. 

Anyone can swing the ax and take out people, delay spending for weeks or months at a time, stop buying spare parts for a PM program, etc. This type of management is in no way related to lean or any other moniker for continuous improvement.  It is short-sighted and discourages the kind of employee involvement necessary in order to achieve and sustain excellence for the long-term.  

In my experience the only time these kinds of draconian actions may be necessary is when the market drops and demand for your products plummets.  In that case the management may have to take drastic measures to quickly re-size the business to the change in demand.  This is why is it so important early in a CI journey to make it clear that hourly jobs won’t be eliminated due to lean. 

But, it’s also important to make this point:  A drastic change in the market demand for our products will be dealt with as necessary to protect the business, i.e. to survive.  This is separate and apart from lean. 

Some lean advocates argue strongly against this but I submit their positions are not “real world.”  Sure, if the best market intelligence is that the slump will only last for several weeks, then companies can typically flex in the short-term and allow attrition to do its magic while also eliminating overtime and the like.  Otherwise, leadership must react quickly to re-size the business.

The more enlightened leader understands that the input and collaboration of machine operators, engineers, supervisors, etc., are critical to the CI process.  As such she will make it clear that the mission is to communicate a strategy for excellence that is actionable in the short-term and sustainable in the long-term.  Certain actions by the leadership will send these kinds of messages:

  • Formal communications plans will be developed and implemented to be sure an aligned and consistent message is being sent to all employees numerous times during the course of the year.
  • Employees will notice a stronger commitment to training.  The business is embarking on a strategy that takes different and better tools with which to solve the priority problems of the business.  As such it is leaderships’ responsibility to be sure everyone is equipped with the appropriate skill set necessary to meet the higher expectations for performance improvement.  Manufacturing, engineering and HR resources will be the conspicuous leaders of this effort.
  • If break-down maintenance is a major shop floor issue, then there might be a short-term spike in purchases of spare parts in order to expedite restoring equipment into specified operating condition.  This would be particularly relevant on any capacity-constrained work centers.
  • There might be some new measurements being discussed and ultimately implemented such as OEE on constraints, a more externally focused method for measuring customer delivery performance, etc.

It’s always important to keep in mind one simple truism:   The leaders of any company are in a fish bowl and the people below them in the organization structure are always looking up to see if their leaders’ behavior matches the words that are being said.   They will spot in a nano second whether the boss is simply using lean to slash costs or if it’s being used to establish a foundation for CI—for achieving and sustaining excellence forever.

Larry E. Fast

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