When researching material for my thesis many years ago, I discovered there was no “silver bullet” for the organizational model for a continuous improvement effort. There is no single model that works for everyone; it varies from organization to organization.
Anyone who has worked with a continuous improvement initiative or lean transformation has discovered that the effort will not work without senior management involvement. This does not necessarily mean that the effort must be completely top-down to be successful. Sound contradictory?
Some experts argue that one of the most progressive company regarding continuous improvement and lean is Toyota Motor Corporation. Toyota’s senior management is involved in, and supportive of, the continuous improvement process. It is certainly not, however, top-down. It was that way when I first benchmarked the company 30 years ago, and it still seems to be consistent today.
The Toyota Production System (TPS), which many organizations try to emulate, is the way the company operates. Their continuous improvement efforts, however, are mostly bottom-up driven, with different work teams leading their own projects.
Isn’t that the holy grail of continuous improvement? Separate work teams identify waste in their own work areas then initiate process improvement activities without specific direction from management. This sounds logical but there are few organizations that have come anywhere close, let alone attained Toyota’s level of participation.
Most continuous improvement programs are treated as the latest management fad; therefore, people look at it as just another “program of the month” being pushed by management. Often, the organization appoints a program “champion.” This person is given the responsibility (usually without organizational authority, senior management involvement or support necessary for success) to “go forth” to implement the program.
Unfortunately, many organizations regularly fail to give the proper support to provide results. This is not the way the organization conducts its other business. In fact, the continuous improvement effort is often at odds with the existing processes and metrics, so it is destined to limp along on its way to mediocrity and eventual failure.
The program “champion” is typically tasked with getting people trained (usually focused on the factory floor, where only a small portion of total improvement can be achieved) and to conduct some kaizen events to work on “leaning” the organization. The employees are not really involved and are just doing what the command-and-control management structure is telling them to do.
For many companies, the ‘rank and file’ have no voice in the projects being undertaken. They are only taught what they need to know about problem-solving for their assigned project. This is the primary reason less than ten percent of continuous improvement efforts produce sustainable results.
Employees must see that this is not just another program, but a commitment to transform processes. The people who are performing value-added work for customers must be involved in the entire process, including the evaluation and selection of projects.
Where the existing business systems conflict with the needs of the lean transformation and the metrics needed for improvement, the legacy systems must be changed or discarded.
Meaningful and sustainable change always present challenges. Chief among these challenges is convincing senior leadership to embrace this approach. This can be difficult since the positive results are often several quarters in the future and could, literally, have a negative short-term impact with conventional financial reporting systems.
Enlightened management accounting systems will show the reduction in working capital, substantial improvement in cash flow, improved quality and on-time delivery, improved productivity, and the creation of additional capacity with little capital investment.
At the same time, the balance sheet and P&L used for external reporting may suffer some short-term negative impact. Most of the initial expense, however, can be categorized as prevention cost, which experts such as Dr. Joseph M. Juran have demonstrated a 3:1 to 5:1 return on investment.
Continuous improvement is more about rigor and discipline than it is about technique. We need to heed the words of Dr. W. Edwards Deming. Organizations need to train everyone to work on the transformation toward a different culture. People must understand the tools of continuous improvement and use those tools to identify and eliminate waste.
Everyone in the organization can contribute to the effort. They also need to have input into the projects being addressed. Then, senior management must be actively involved in supporting the improvement efforts.
Properly supported and rewarded, continuous improvement will produce a positive environment to make it a way of life. Everyone wins!
