Engagement and change: part 2 – lean thinking

This post by guest blogger Alex Twigg is the second part of a two-part post.

Much of the change in workplaces over the last few decades has been predicated on notions of economic efficiency and have been known variously as “downsizing”, “rightsizing”, “outsourcing” and more recently as “mergers and acquisitions” – and as the Kotter and McKinsey studies mentioned in part one shows – not much of it successful. In the February / March edition of the Harvard Business Review, an article on mergers and acquisitions quotes the following – “Companies spend more than $2 trillion on acquisitions every year, yet the M&A failure rate is between 70% and 90%.”

By contrast, an alternative model of change – one that is intrinsically engaging of employees, that is about “learning to do things with others” is a workplace transformation process known as Lean Thinking – a western lens on the Toyota Production System.

The ‘lean” or “less” of Lean Thinking is often misunderstood. It is not about cost cutting (the old traditional focus of change) and it is certainly not about retrenching – i.e. less staff. Rather Lean Thinking is based on two values: continuous improvement and respect for people. The system of “lean thinking” is the mutual reinforcing of these twin values through a structured process of principles and actions – that in its essence is fundamentally engaging of employees.

Reducing waste

Lean Thinking is not premised on the assumptions of “economies of scale” and its twin “resource optimisation” – the assumptions that shape traditional approaches to organisational change. Rather it focuses on a notion called “flow” and the removal of waste. It is primarily focussed on process efficiency rather than economic efficiency.

The traditional approaches to change and Lean Thinking depend on very different primary sources of data to inform change. In the former the data derives from an abstraction of the productive process – namely the organisation’s statements of account. The primary question in this approach is “how do we make the economic equation of this organisation work?” This is the question that has shaped all the “”downsizing” “rightsizing and “mergers and acquisitions” activity of the past. In “lean” the primary source of data for change is from the organisation’s productive processes themselves – through the identification and removal of waste to answer the primary question of “how do we make value flow?”

Lean Thinking identifies 7 forms of waste, namely motion, waiting, transportation, storage, defect waste, over producing and excessive processing. Space precludes a discussion of each of them me so for present purposes a description of the first will have to suffice as a sense of the thinking behind waste generally.

Motion waste consists of all unnecessary movement and searching. Searching is the biggest form of motion waste – searching for information, looking for the correct person, tool or document. It is estimated that between 20 – 50% of time in a physical workplace is spent looking for people, tools, specifications, patient information … and in an office environment, some 15% of our time is spent looking for information that is within an arm’s length! In addition to searching, motion waste includes all unnecessary bending, lifting, reaching and walking. 

To systematically remove waste from an organisation’s processes requires the active involvement of the employees who are uniquely positioned to see the waste. Managers cannot see deep enough into the processes to really identify the waste that the employees see and experience daily.

This creates a dilemma for organisations – managers have the authority to effect change but not the complete awareness required on which to base this change; and employees by contrast have the awareness but not the authority.

The employee engagement strategy to Lean Thinking is to structure a process that seeks to resolve this dilemma. It requires 2 guarantees to give it meaning – one procedural, namely participation by all in identifying waste – the other substantive – no redundancies as a result of lean initiatives. The former is essential to identify and remove waste. And the latter is required otherwise employees won’t participate. Clearly no-one will participate in identifying waste if their jobs are put on the line as a result – and flow cannot be improved if employees do not participate in identifying waste.

The central component of a change process premised on employee engagement is a closed loop feedback system for responding to and implementing employee generated suggestions for improvement based on identifying and reducing waste. This is nothing like the good old suggestion box though on the surface it may appear similar.

This system is built on a structured process of organisational learning that teaches the organisation the following:

  • value stream mapping skills that allows everyone to see the organisation’s current end to end process to providing its services or manufacturing its goods, as well as imagine an improved future state. This creates a framework for employees to think about and identify the effects of waste that they experience everyday at work.
  • root cause analysis skills that allows everyone to identify the causes behind the effects of waste that they experience everyday at work as frustrations, irritations, inefficiencies etc.
  • developing the systems and processes – the architecture if you will – of this transparent, closed loop system that allows people to see that the individual opportunities for improvement they have raised have been captured, and how and who is able to participate in addressing them.

Removing waste reduces lead time enabling more resources to be
dedicated to adding value

When this process is introduced in workplaces it results in literally hundreds of employee identified “Opportunities for Improvement” or OFIs.

If one is looking for a measure of employee engagement, how good is this one? Surely this is a direct expression of an employee’s commitment to an organisation? And very importantly it is a measure that arises directly from every employees work – i.e. their involvement in the organisation’s processes rather than arising indirectly – i.e. from something external to their everyday work – like completing a survey that creates a new bureaucratic structure that adds little or nothing to either the flow of goods and services through an organisation or the flow of problem solving in the organisation.

Lean thinking is an example of the sort of workplace improvement strategy that the Department of Labour is supporting through its High Performance Working Initiative.  You can find out more about this at www.dol.govt.nz/er/bestpractice/hpwi/index.asp

Guest blogger: Alex Twigg

Alex Twigg presented at the recent HRINZ National Conference in 2011. He has extensive experience in employment relations (ER) in a variety of roles including mediation, arbitration, advocacy, facilitator and process consultant. Over the last four years he shifted from operational to strategic ER – focusing on the link between people, process and organisational performance.

Alexander is currently employed by the Department of Labour’s Partnership Resource Centre.  He works with unionised workplaces helping the parties improve their workplace relationships and then help them put those relationships to work using frameworks such as ‘Lean Thinking’ to help both parties achieve their mutual and separate interests.

Advertisements

2 thoughts on “Engagement and change: part 2 – lean thinking

  1. Alex, this post is nicely done. Its also worth pointing out that the Toyota Production System has its origins in the works of William Edwards Demming, who taught a management style often referred to as Total Quality Management (TQM). Im sure it can be traced further back than Demming, but he is commonly credited with the Toyota method. The same philosophy or style can be found in many iterations, and forms. In the field of project management, the seas are shifting to the Agile methodology, which promotes value-driven processes and Lean development, as opposed to the highly structured and rigid traditional project management methodology.

    Looking forward to reading more of your posts.

  2. Pingback: Learning as a foundation for engagement, part 3: Tools | Stakeholder Engagement

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s