Lean Roadmap Newsletter
Becoming a World Class Enterprise 
20th Edition  
In this edition, we continue our discussion on How to Prevent Lean Implementation Failures - 10 Reasons Why Failures Occur. We will discuss, from the least critical (Reason #10), to most critical/fatal (Reason #1) why Lean implementation failures occur. Today we will discuss Reason #1:
  • Why Lean Failures Occur - Reason #1: Lack of Top Management Leadership and Support 
Also, in this edition we continue with our Lean Leader Coach series:
  • The Lean Leader Coach - "Walking the Talk - Part III"

This series is intended to provide tools, tips, ideas, and coaching for leaders whose organizations are implementing Lean as their operating system.

Free Lean Webinar Schedule

(A complete schedule can be found at www.wcmfg.com)
Introduction to A3 Problem Solving
This is an introduction to the structured problem solving format known as A3 Problem Solving. Popularized by Toyota, the A3 format is used in Toyota for problem solving, proposal writing, and status reports.

This is a repeat of the previous A3 Webinar

Title: Introduction to A3 Problem Solving

Date: Thursday, November 19, 2009

Time: 3:00 PM - 4:00 PM Eastern Standard Time

Space is limited.
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10 Reasons Why Lean Implementations Fail
Reason #1: Lack of Top Management
Leadership and Support
All successful and sustainable Lean implementations start with top management. 
by Larry Rubrich
Implementing a Lean/World Class Enterprise (WCE) is not a bottom-up, or middle-out implementation. Successful and sustainable implementations are strictly top down! Having said that, it is important to note that top management by itself cannot make a company World Class. Once top management has provided the proper support and foundation for a WCE implementation, companies become World Class when every person in the facility understands why becoming World Class is important to their customers, the company, and ultimately to them. This common goal/mission creates a foundation for everyone to pull in the same direction (teamwork). This lack of a common goal/mission and teamwork is why bottom-up or middle-out implementations cannot change the entire company. Enthusiastic (about WCE) managers or supervisors have been known to make major improvements in their area of control even without the support of top management. Unfortunately, without top management support, sustainability is a problem. The manager gets moved, promoted, or changes jobs, and suddenly everyone remaining is left with the question "Why are we doing this?" To get back into their comfort zone, and with the support of the new manager, the group then puts everything back the way it was before the former manager changed it.
 Current Thinking  
In John Kotter's book, Leading Change, he identifies the five change implementation prerequisites that management is responsible for successfully completing, before change can begin: 
  1. Creating a sense of change urgency
  2. Creating/developing a company change guiding coalition or alliance
  3. Developing a vision of the required company future state and a strategy to achieve it
  4. Communicating the vision and strategy to the entire workforce
  5. Creating an environment in the company where associate empowerment can evolve
1. Creating a Sense of Change Urgency
Whether the change is to our personal lives or our business lives, change does not occur without a sense of urgency to do so.
In fact, John Brandt, a contributing editor to Industry Week magazine and CEO for The MPI Group, noted that the common thread in the ten-plus years of Industry Week's "Best Plant" awards is that all of these companies had a "near death" experience.
The reality is that all businesses today are under a tremendous amount of competitive pressure from the global economy. The pre-global economy selling price model was:

    Selling Price = Cost + Desired Profit

Rolled up in the cost of the product or service were all the wasteful activities that occurred in the business (scrap, rework, unnecessary overtime, equipment downtime, searching, hunting, looking for stuff, unnecessary motion, reconciliations, supplier invoices, counting inventory, receiving inspection, and on and on and on). This formula has been replaced in the current global economy by:

    Profit = Selling Price - Cost

where the selling price is now set by the customer/consumer. If this is not what is happening in your business today, it's down the street headed your way. Companies today can control profitability only by controlling their costs. WCE is the technique that can accomplish this control.
To create this sense of urgency to change, top management must tell all company associates (that means everyone) in a company-wide meeting what the current market conditions are in a professional, non-threatening fashion. Remember, the goal of this communication is to create a sense or urgency, not the potential panic reaction to a threat.
Company associates (98% of them anyway), want to take care of the customer, want the company to be successful, and want their jobs secured in the future. In many cases, associates already recognize the competitive nature of the current business environment. If properly presented, this common mission and common goal provides the basis for everyone pulling together in the same direction (teamwork).

Now that a sense of urgency exists, the tools/ability for the team to participate in relieving this current sense of urgency must be presented.

2. Creating/Developing a Company Change Guiding Coalition or Alliance
The purpose of this Guiding Coalition or alliance is to help guide the company and the associates through the required changes. Additionally, the Guiding Coalition enhances company-wide, two-way communication in three vital areas of the WCE implementation. These areas are:
  • Visual and verbal updates to the entire company on the status of the WCE implementation.
  • Honest feedback from all areas of the company on how the implementation is proceeding.  Successes as well as suggested improvements.
  • Making and communicating WCE implementation course adjustments along the way. This results from the fact that most companies are only successful with 70-80% of their implementation efforts, and market conditions can change over the years a WCE implementation can take.
With these purposes in mind, members of the Guiding Coalition must include/represent: 
  • All levels within the organization
  • People who are trusted by their peers
  • Good communicators and team players
  • Individuals with a strong desire to participate in securing the future
  • A good mix of both leaders and managers. Leaders drive the changes and managers control the process. Too many managers on this team results in the team members from the lower levels in the organization eventually not being heard.
3. Developing a Vision of the Company Future State and a Strategy to Achieve
Top company management, with their high-level view of customers and markets, must develop a visual picture and verbal description of what the company must look like at some point in the future (3-5-7 years) to insure the company is still competitive and still in business. This vision must include both people and processes, as well as products and services. The reality is this: becoming a World Class company by itself does not guarantee a company's future. The company must still produce a product or service customers want. For example: if a company was the World Class producer of buggy whips or steam engines, would it still be in business? Probably not.
The strategy to become World Class has two parts:
  • Lean to eliminate waste and efficiently run the processes that provide what the customer is willing to pay for (value-added processes).
  • A sales/marketing plan which is always in touch with the "voice of the customer."
4. Communicating the Vision and Strategy to the Entire Workforce

This is where American management fails miserably! Creating the vision and strategy can be done successfully - even superbly. Somehow, however, it is believed that if six or seven of the top managers know what the plan is, it will become a reality. To use a football analogy, it's like the quarterback going into the huddle and telling only the wide receiver and the halfback what the play is and then expecting the play to be successful. The entire team must know the play to be successful.

We are fully expecting our people to do the right thing, and they will beyond our expectations, but we must communicate to them what the customer wants them to do. 

5. Creating an Environment Where Associate Empowerment Can   Evolve
Yes, evolve is the correct word. Associate empowerment is an evolutionary process, not revolutionary!

All the tools and techniques of WCE are designed to eliminate business waste. Like tools in a tool box, each tool has a waste identification or elimination speciality. Unfortunately, the WCE tools are in a "locked" tool box unless associates are empowered to open the box. This is a key point. In the above example of only communicating the plan to 6 or 7 managers, these 6 or 7 managers could make some changes and improvements in the next 12 months. Could these improvements make the company globally competitive? Probably not.
Instead of just communicating to the 6 or 7 managers, communicate to the entire workforce - say 400 people. Communicate the company vision and strategy, teach 400 people the WCE tools and techniques, and  ask them to make small improvements in their work area everyday. After 12 months of this, the company has now made huge improvements.
The company may not be globally competitive yet, but if you stand on a foot stool, you can see World Class from there!
The problem is that this level of empowerment and participation takes years to develop because of the evolutionary nature of empowerment. This means that creating this environment must start today!
But what are the elements of an empowered environment? They are:
  • Associates are recognized as the most valuable resource. World Class companies recognize that their associates can differentiate them from the competition. While the competition may be able to duplicate their facilities and equipment, they may not be able to duplicate the participation and motivation of their people.
  • Teamwork is utilized throughout the organization.
  • Decision making is delegated to the lowest possible levels in the company.
  • Openness, initiative, and risk-taking are promoted.
  • Accountability, credit, responsibility, and ownership are shared. Ownership means psychological ownership, which is far more important to empowerment than just stock certificate ownership. Psychological ownership develops as a result of associates feeling like the 50 square feet they work in everyday is "their part of the business."
A better understanding of what empowerment is can be developed also by knowing the barriers to empowerment. The common thread through all of these barriers is a lack of communication. The barriers are: 
  • Lack of trust
  • Poor communication - can lead to lack of clear expectations, lack of trust, fear
  • Fear - people fear the unknown and therefore resist change
  • Lack of training - inadequate training leads to confusion, frustration and anger
  • Lack of measurements - align all company systems to the vision. First, you must measure the current performance of any activity that you wish to improve. No measurement - no improvement. Second, to implement WCE, you must revise the company's associate evaluation systems, promotion systems, pay increase methods, and bonus systems to support WCE implementation goals. There cannot be mixed messages in any company systems. For example: people who do not support WCE won't get promoted. 
Other Areas of Required Top Management Support
WCE Kickoff Meeting
The initial kickoff meeting, which includes creating the sense of urgency and discussion of the company vision and strategies, must come from the top manager in the organization. There cannot be any question about the company direction and the only way people can be assured of that is to hear it from the top person.
To prevent rumors from developing and spreading, these meetings should include all company associates and should occur in as short a time period as possible.
This communication should include a deployment plan and timetable so company associates know when they will become involved.

No Layoff Policy
A "no layoff policy" as a result of WCE improvements must be implemented on day one. This does not mean that if the company loses a major customer or the economy goes into recession layoffs cannot occur. It does mean that no one goes out the door as a result of the major productivity and other improvements that occur with WCE. Only normal attrition can be used to reduce the number of associates.
There is a very practical reason for this. WCE is a people-based improvement activity. Eighty percent of the ideas and improvements that occur in a company's World Class journey will come from the people in the company. If people think that they or other associates will be laid off as a result of their ideas, there will not be any more participation in making improvements.
So, what do companies do in this transitional period between being a traditional manufacturer and growing the business as a result of improved competitiveness that moving toward WCE brings? First, they "in-source" jobs, operations, and material that had previously been out-sourced to suppliers. Secondly, and some companies do both, the extra people are moved into additional/other WCE activities. This accelerates the amount of improvements that can be made.

The American Licorice Company reduced this transitional period by almost immediately converting quality and productivity improvements that their associates made into product price reductions to their brokers and customers. Improved visibility as a candy supplier and improved sales were the result.
Understand that this no layoff policy only applies to the WCE implementation. If the company loses a major customer or the economy goes into recession, layoffs may be necessary to protect the survival of the company.
Summary-Reason #1
Lack of top management support for a WCE implementation can be an extremely costly, and if left unaccomplished, fatal mistake. Management must prepare the foundation for this change to WCE, and then let the associates make the company World Class.

Top Management

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The Lean Leader Coach - Walking the Talk - Part III

This series is intended to provide tools, tips, ideas, and coaching for leaders whose organizations are implementing Lean as their operating system.
by Mattie Watson
In the previous two newsletters we stated that leaders who intentionally or unintentionally withhold support for Lean create a negative work environment where Lean will not succeed.  In this issue, we will discuss how to prevent the perception of this lack of support and handle the situation if violations have already occurred. 
First, the implementation of Lean should be undertaken very systematically.  Unfortunately, this is not often the case.  What usually happens is that someone on the Leadership Team (Plant Manager, Owner) has read a book or attended a 2-hour seminar on Lean and decides this is the future of the company.  Someone from HR or the Quality group is "honored" with the task of implementing the system (while at the same time keeping up with their regular job assignment) while the management team sits back and waits to start counting the money saved.  If this sounds like the approach your organization has taken, my question is "How's that working for you?"  Chances are everyone (from the management team through the hourly associates involved in the initial projects) is frustrated and disillusioned.  The end of Lean is imminent if not already final.

The best way to systematize the Lean implementation is to use Policy Deployment.  This process (completed by the highest level Leadership Team or Guiding Coalition) defines the specific projects that will be undertaken to support meeting the organization's financial goals.  The Leadership team defines these goals (for a one-year period) and then solicits the help of many others in the organization to brainstorm improvement ideas that will contribute to the achievement of those goals.  The best part of the Policy Deployment process is that the Leadership Team begins to understand the level of commitment needed to support the Lean initiative.  At this time, the pre-work for preventing resistance (not just at the leadership level) can begin.  This may involve leadership training, one-on-one discussions, communication initiatives, etc., depending on the specific situation.
Most resistance comes from fear.  In a Lean implementation, people may fear loss of control, loss of their job, a new way of operating, etc.  Communicating the new behavioral expectations and what will be happening during the implementation before these fears take deep root can significantly diminish the resistance.  During Policy Deployment, the Leadership Team defines these behavioral expectations at the same time the goals are created. 

What should be the behavior once a violation occurs? Let's say a Leader, who truly supports the Lean initiative, acts in a way that violates (or is perceived to violate) the new way of operating.  In this case, the best thing the leader can do is acknowledge the behavior and explain why it was done (5% of the time) OR apologize, learn from the situation, and move on (95 % of the time).  This may be hard to swallow but Leaders can make mistakes.  One way to prevent an unraveling of the organization should this occur is to recognize the possibility ahead of time.  Leaders should be telling the organization that they themselves are learning the Lean system along with everyone else.  When new behavior is being learned, some backsliding is natural for a variety of reasons.  Both the Leaders and the followers need some leeway to try new things, make mistakes, learn from these and move on without having the incident etched forever in their permanent records. 

The bottom line is that Leaders who fail to walk the talk start (or continue) breeding an atmosphere of distrust.  Once you say you are committed to the Lean initiative you must be willing to behave in a manner that confirms your words.  If you don't, the negative ramifications will be far-reaching and long-term. 
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Certified Lean Facilitator Training (Administrative/Service) 

Mechanicsburg, PA

This standard Certified Lean Facilitator training session will be hosted by CenterPoint Engineering Inc.

Centerpoint is a Construction Engineering firm.  
You can attend just one class or start the journey to becoming a Certified Lean Facilitator by attending all 3 weeks.
Session dates are (2010):
Week 1 = February 22nd
Week 2 = March 22nd
Week 3 = April 19th
For scheduling, call Kelly at (260) 637-8064 or e-mail kelly@wcmfg.com

Certified Lean Facilitator Training (Manufacturing)

Milwaukee, WI


This standard Certified Lean Facilitator training session will be hosted by Snap-on Tools in Milwaukee, WI.
You can attend just one class or start the journey to becoming a Certified Lean Facilitator by attending all 3 weeks.
Session dates are (2010):
Week 1 = January 11th
Week 2 = February 15th
Week 3 = March 15th
For more information and pricing, Click Here
For scheduling call Kelly at (260) 637-8064 or email kelly@wcmfg.com

Certified Lean Facilitator Training (Manufacturing)

Appleton, WI 


This standard Certified Lean Facilitator training session will be hosted by Goodwill Industries in Appleton, WI.  
You can attend just one class or start the journey to becoming a Certified Lean Facilitator by attending all 3 weeks.
Session dates are (2010):
Week 1 = January 11th
Week 2 = February 8th
Week 3 = March 8th
For scheduling, call Kelly at (260) 637-8064 or e-mail kelly@wcmfg.com
For more information and pricing, Click Here
Next Edition:  
  • 14 Considerations/Rules When Implementing Kanbans    
  • Administrative Processing Cells, a Powerful Lean Tool for the Office! 
Larry Rubrich
WCM Associates LLC
© 2009 WCM Associates
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