Chapter 18 – Lean Management, or How Collaboration Enables One Plus One to Equal More than Two

You have been asked to transform a back office team that has not performed well. In fact, directors outside your functional group state that “most of the team should be fired.” How should you proceed?

Back office personnel are not typically attracted to superhero movies or graphic novels, which is fortunate, because they might shout out that anointing anyone with superpowers, such as Employee of the Month, is an act of pure fiction. More cynical employees might ponder whether the absence of such awards is correlative to group success. In past decades, leadership practices by Jack Welch acolytes, which have been praised in spite of the checkered results of their companies, have focused on high performing individuals and stack rankings. Their goals have been to produce “super” employees. Instead, organizations produce better outcomes if management focuses on architecting networks of trusting relationships rather than attempting to promote mythical Supermen and Wonder Women.

Develop a Shared Understanding of Your Organization’s Value Streams

Because a company is not a set of independent functional teams but a system of interdependent activities performed by employees, the starting point of constructing trusting relationships is to develop a shared understanding of your organization’s value streams (end-to-end processes starting from customer requests to delivery). Understanding comes from an examination of current processes. Examination will spur a dialog that allows members of different teams to share information, exposing the importance of interdependence between teams, showing how issues not visible beyond a certain activity can result in collective failure, and demonstrating how all the pieces of your business fit together.

The goals of examination are simple:

1. Find out what is most important to customers
2. Take off the blinders and have employees talk to each other
3. Develop an insight into the work each team performs
4. Establish boundaries for work (e.g., who is responsible or accountable for the output of specific activities and who must be informed or consulted before a decision is made to alter how work activities are performed)
5. Emphasize group success

The Lean methodology empowers employees; once they understand how every link of a value stream works, they are able to use their ingenuity to figure out the best way to increase the flow of work for each stream. The best ideas will come from individuals that work with others to explore how a process can be improved. As individuals help one another to improve processes, they develop a connection to their team and across teams. This shared sense of purpose will allow them to endure the hardships of changing a process without reducing the output of that process.

Position Each Team Member as an Owner

Team Success is dependent on having the right people – with divergent skills and points of view – in the right roles. Focus on roles first, then on people. The key is to position each individual as the owner of a function, process or product, pushing decision making to the people who do the work. Measure the process, not the people. Use metrics as a tool of persuasion and to shape choices. When a group draws a value stream map they will need to evaluate the time needed to complete each activity. Only a fraction of cycle time adds value. The group will view all steps through a time lense to evaluate value added time versus total time to complete. This analysis will help the team understand where they are over and understaffed as they try to allocate resources or prioritize projects. And it will give teams a clear view of the interdependent reality of their operations, allowing them to exploit opportunities or adapt to change.

Based on our experience, individuals who collaborate with others to improve value streams quickly come to understand that they are part of some shared purpose bigger than themselves. As they experience the effects of autonomy, authority, appreciation, and enduring hardship together, a rare and precious thing is triggered: an atmosphere of trust. Trust – defined as a multiple of credibility, reliability and accessibility divided by self interest – is what generates commitment. Commitment enables individuals, teams and organizations to perform far beyond what they have previously achieved.

Focus on the Team as a Whole, Not Just Star Performers

Many organizations prevent networks of trusting relationships from arising when the implement a performance management model popularized by Jack Welch. The model is famous for focusing on “elite” or “star” performers. What gets less attention is that the model advocates “stack rankings” and cuts to the bottom five percent of employees. Lavishly rewarding stars and pruning weak performers creates waste in the form of emotional strain on every employee. An army of human resource personnel is required to referee the dreaded performance review meetings where managers fight and bargain to make distinctions between essentially equal employees. Instead of paying attention to important work questions such as “what do our customers want?” or “how do we deliver it in a more timely manner?,” the entire workforce halts productive activities to focus on endless rounds of performance evaluations. As a result, counterproductive habits develop. Individuals avoid working with top performers since stars get credit and others nothing but blame. Internal rivalries arise as everyone campaigns to be a “star.” No one feels safe to pitch new ideas or discuss them candidly. Cooperation becomes irrelevant once workers recognize that their interests are dependant upon managers who are in a competition to assert their pre-eminence.

Implemented correctly, Lean management methods build networks of trusting relationships. Decision making is pushed down to the hands of every worker, giving each of them a sense of purpose. Cooperation and collaboration are encouraged, facilitating organizational cohesion and benefits beyond what management can direct.  But trust cannot exist in a climate where employees are stack ranked and yanked. The star system cannot co-exist with Lean methods. One builds trust, and the other builds distrust. Only one is the gateway to greater long term success.

Please share similar problems and solutions with us.